Terra-Gen Power Announces Closing Of $1.2B Construction Financing

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Terra-Gen Power LLC has closed a $1.2 billion financing deal for four wind power projects with a total of 570 MW of capacity at its Alta Wind Energy Center in Kern County, Calif. The four projects, known as Alta Projects II-V, will use 190 V90-3.0 MW turbines manufactured by Vestas-American Wind Technology Inc.

The $1.2 billion financing for the Alta Projects II-V included the issuance of approximately $580 million of pass-through certificates due 2035 via a Rule 144A offering, a construction bridge loan facility of $499 million and ancillary credit facilities of $127 million. Proceeds from the certificates and bridge loans will be used to fund construction of the projects.

Citi, Barclays Capital and Credit Suisse acted as joint book-running managers for the issuance of the pass-through certificates. Mitsubishi UFJ Securities, Credit Agricole Securities, ING and Rabo Securities acted as co-managers. MUFG Power & Utilities Group, Credit Agricole, ING Capital, Rabobank, Citi, Barclays and Bank of Montreal provided the credit facilities, with Credit Agricole acting as administrative agent, and MUFG Power & Utilities Group, Credit Agricole, ING Capital, Rabobank, Citi and Barclays acting as joint lead arrangers.

The permanent financing of Alta Projects II-V is structured as a leveraged lease whereby Citibank NA has committed to purchase the projects at the start of commercial operations and lease them back to Terra-Gen. Terra-Gen will continue to manage and operate the wind projects under long-term agreements.

The Alta Wind Energy Center is expected ultimately to provide up to 3,000 MW of generating capacity, of which 1,550 MW will fulfill a power purchase agreement signed with Southern California Edison in 2006.

Project construction is expected to begin immediately, with commercial operation anticipated in the first and second quarters of 2011. Delivery and commissioning of the Vestas turbines is scheduled to begin in October. Alta Project I is anticipated to begin commercial operations in January 2011.

SOURCE: Terra-Gen Power

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