Watts Wind Energy Inc., a joint venture between Seaforth Engineering and Eon WindElectric Inc., has signed a 20-year power purchase agreement (PPA) with Nova Scotia Power Inc.
Watts plans to install a single 1.5 MW Vensys V77 wind turbine at Watt Section, Nova Scotia. Seaforth Energy Inc. has been contracted to manage Watts Wind Energy, and Eon WindElectric, a wind farm installation and servicing firm, will be providing wind consulting and project management services.
In addition to cash investment from the principals, the Watts project will also be financed with a mix of secured debt-and-equity capital. The current intent of Watts is to annually distribute most of its net profits to shareholders by way of dividends after paying all expenses and contributing to a capital reserve account, rather than reinvesting any profits into Watts Wind Energy.
Although the current intent is that Watts will own the entire wind project, the company may choose to sell a portion of the project; partner or joint venture with another company to develop the project; spin off the project into a new entity, which could be partially owned by Watts; or otherwise take actions, whereby it would only own a portion of the project.
Watts Wind Energy is being organized as a special-purpose community economic development investment fund (CEDIF), which is registered retirement savings plan (RRSP) eligible and provides the potential for up to 65% in tax benefits to eligible Nova Scotia investors, subject to various conditions.
This structure aims to provide Nova Scotia investors with the tax benefits of the CEDIF structure and tax deferrals of RRSPs while aiming to provide an annual return to investors from the net profits of Watts Wind Energy, rather than using net profits for other purposes.
SOURCE: Seaforth Engineering Group
