Quebec-based Innergex Renewable Energy Inc. announced the acquisition of a sizable photovoltaic solar project located in Winkler County, Texas, from Longroad Energy Partners, LLC.
Total construction costs are estimated at $397 million and will be partly financed in priority through a $292 million construction and long-term project financing led by the Energy Finance unit of CIT Group Inc. Innergex will fund its $105 million equity commitment after the debt is fully drawn. This obligation will be supported by the issuance of a letter of credit.
At commercial operation, a subsidiary of Wells Fargo is expected to fund the tax equity investment. This investment will be used to repay the tax equity bridge loan, with the balance being distributed to Innergex.
Full notice to proceed with construction of the 250 MWAC/315 MWDC project was issued and commercial operation should be reached in the third quarter 2019, Innergex said. The financial close for the project's non-recourse construction, term debt and tax equity financing was also reached.
"We are very much looking forward to breaking ground on our largest solar project to date. I am confident that our experience and expertise in developing and managing renewable energy projects will ensure the successful completion of the Phoebe project and demonstrate our commitment to growing our diversified portfolio of assets", said Michel Letellier, President and Chief Executive Officer of Innergex. "With this acquisition, we are in a good position to provide peak renewable power to the he ERCOT (Electric Reliability Council of Texas) market, complementing wind energy production and diversifying our footprint in the state. This acquisition brings us closer to exceeding our goal of achieving net 2,000 MW by 2020."
The average annual power generation is expected to reach 738,000 MWh, enough to power about 53,000 Texas households. The Phoebe solar facility will sell 100 percent of its output to the ERCOT power grid and receive a fixed price on 89 percent of its energy produced under a 12-year power purchase agreement with Shell Energy North America, commencing in July 2019. The remainder of the project's output will receive a merchant market price. The facility will also benefit from the sale of Renewable Energy Certificates in the merchant market to boost its revenues.
The project is expecting a projected Adjusted EBITDA of approximately $20.2 million for 12-month of operations.