Pattern Energy Group Inc. has announced agreements to acquire ownership interests in two operating wind power facilities, the Henvey Inlet Wind facility in Ontario and the Grady Wind facility in New Mexico.
Pattern Energy is committing to pay C$242.4 million at closing to acquire 100% of Pattern Energy Group LP’s (PEG LP) 50% equity ownership interest (equating to a 50% owned interest or 150 MW of owned capacity) in the 300 MW Henvey Inlet Wind facility. Nigig Power Corp., a subsidiary of the Henvey Inlet First Nation, owns the remaining 50% interest in the facility.
Henvey Inlet Wind, located on the northeast shore of the Georgian Bay in Ontario, commenced commercial operations in September. The facility uses 87 Vestas 3.45 MW turbines and has a 20-year power purchase agreement (PPA) with the independent electricity system operator for 100% of its production. The acquisition is expected to close in the next 15 days.
As part of the acquisition, Pattern Energy is purchasing from PEG LP a C$97 million loan outstanding with Nigig Power. The loan was made to Nigig Power to allow it to fund a portion of the construction cost, and it is expected to be repaid in less than 12 months.
Pattern Energy has also acquired 51% of Pattern Development’s Class B member interest in the 220 MW Grady Wind facility for $99.45 million for an owned interest of 101 MW. Grady Wind is located in Curry County, N.M., and commenced commercial operations in the third quarter. The Public Sector Pension Investment Board is acquiring the remaining Class B member interest. The facility uses 84 Siemens Gamesa 2.625 MW turbines and has a 25-year PPA with Sacramento Municipal Utility District.
The company has also entered into an agreement for a $260 million private placement of perpetual preferred stock with certain institutional investors. It intends to use a portion of the net proceeds to finance the two acquisitions.
“These acquisitions increase our portfolio by 13 percent to 4.4 gigawatts of operational capacity across 28 renewable energy facilities,” states Mike Garland, CEO of Pattern Energy. “The Henvey Inlet and Grady acquisitions are immediately accretive to CAFD per share, with each facility characterized by strong cash flow profiles that are backed by long-term power contracts with investment-grade off-takers. The preferred stock offering enhances the company’s financial flexibility and demonstrates our ability to attract institutional capital into our business. The preferred security offers an attractive alternative equity funding source that is accretive to our common shareholders.”
