Growing its portfolio to 12 wind power projects, Pattern Energy Group Inc. has acquired the 200 megawatt (MW) Logan’s Gap Wind project in Texas, which is currently under construction, from Pattern Development.
Logan’s Gap Wind is being built in Comanche County, Texas, and consists of 87 Siemens 2.3 MW wind turbines. Located near the Dallas-Fort Worth area, Logan’s Gap Wind will be the company’s fourth wind project in Texas, serving three different regions throughout the state.
Wal-Mart Stores, Inc. has a 10-year power purchase agreement (PPA) to acquire 58% of the expected output from the project. Seventeen percent of the expected output will be sold under a 13-year fixed price agreement with a A-/Baa2-rated financial institution. The remaining 25% of expected output will be sold at ERCOT spot market prices.
Upon completion of the project, Pattern Energy will have an owned interest of 164 MW and three institutional tax equity investors will acquire the balance.
Following construction, the project is structured to be financed with all equity and not with project debt. The company acquired the Logan’s Gap Wind project for a total cash funding commitment of approximately US$113 million, a portion of which will be used to pay down construction debt upon the completion of construction. The acquisition will be funded from available cash and credit facilities.
Mike Garland, CEO of Pattern Energy, stated:
“We are pioneering new markets for the sale of our electricity to leading corporations like Walmart who are pursuing clean energy for their businesses. Pattern Development has more than 30 projects in development at any given time, providing a broad and deep resource for our continued growth and the potential of accelerated drop downs. Our outlook for future acquisitions is better than we have ever seen, as Pattern Development has recently added more projects to its development pipeline through third-party acquisitions.”
Pattern Energy has rights of first offer to Pattern Development’s project development pipeline, which includes more than 3,000 MW. Projects are added to Pattern Energy’s list of identified Right of First Offer (ROFO) projects when they reach identified milestones, such as when a project has executed a power purchase agreement.