IPPToday #242: Longroad Energy Announces Sale, FC, and start of construction of the Phoebe Solar Project
Related M&A Transactions
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Longroad Energy Holdings, LLC has announced the sale of the Phoebe solar project to Innergex Renewable Energy Inc. The project also achieved financial closing and start of construction simultaneously with the sale.
The Phoebe photovoltaic solar project is located in Winkler County in West Texas and consists of First Solar Series 6 thin film modules that will be operated by the panel manufacturer under a 5-year operation and maintenance contract. The installed capacity will be 250 MWAC/315 MWDC and the average annual power generation is expected to reach 738,000 MWh.
The project, which will be the largest solar project in Texas, is scheduled to achieve commercial operation in the second half of 2019.
CIT led the construction and term project financing with a subsidiary of Wells Fargo providing the tax equity financing.
The Phoebe solar facility will sell 100% of its output to the ERCOT power grid and receive a fixed price on 89% of its energy produced under a 12-year power purchase agreement with Shell Energy North America, commencing in July 2019.
Total construction costs are estimated at US$397 million and will be partly financed in priority through a US$292 million construction and long-term project financing led by the Energy Finance unit of CIT Group Inc. Innergex will fund its US$105 million equity commitment after the debt is fully drawn. At commercial operation, a subsidiary of Wells Fargo is expected to fund the tax equity investment.
Longroad and 7X Energy, Inc. jointly developed the project. Longroad arranged financing for the Phoebe project and will be assisting in the construction management. Phoebe was one of the projects comprising the 3 GW development asset transaction that Longroad completed with 7X in December 2016. The Longroad and 7X teams worked together to bring this project to completion, especially in the areas of local development and project design.
Paul Gaynor, CEO of Longroad said:
“We are pleased to have sold the Phoebe project to Innergex Renewable Energy Inc, who had a strategic desire to grow its solar portfolio. Longroad appreciates the cooperative spirit and participation of the many landowners involved, with a special thanks to the Wight family. Also, we would like to thank the leadership and community of Winkler County, including the Winkler County Commissioners Court and the Honorable Judge Charles Wolf, the Wink-Loving Independent School District and its Board of Trustees, and the Winkler County Hospital District”