“EMG has established itself as a leading developer, owner and operator in the U.S. wind energy industry, and Capistrano Wind Partners will now build upon that platform to fund large-scale wind farm projects with an equity investment that offers the potential for steady cash flows and consistent long-term returns.”
“We are pleased to enter into a partnership with two experienced investors to help drive the growth of clean wind energy in this country,” said Pedro Pizarro, president of EMG. “EMG has established itself as a leading developer, owner and operator in the U.S. wind energy industry, and Capistrano Wind Partners will now build upon that platform to fund large-scale wind farm projects with an equity investment that offers the potential for steady cash flows and consistent long-term returns.”
“Investing in operational wind energy developments alongside a leading developer and operator is a natural extension of our natural resources and infrastructure investment platform,” said Lisa Ferraro, managing director, energy investments, TIAA-CREF. “These investments match TIAA-CREF’s long-term investment focus on infrastructure and energy projects that meet a growing need for energy and that we expect to deliver durable returns.”
“CIRI is excited to team with such high-quality partners as Edison Mission Group and TIAA-CREF to form Capistrano Wind Partners, LLC,” said Stig Colberg, CIRI chief financial officer. “This transaction offers potential long-term growth and profitability while developing sustainable, domestic energy resources that will decrease our nation’s reliance on imported energy. CIRI looks forward to working with our new partners to pursue current and future investment opportunities.”
EMG companies currently own and operate a portfolio of 31 wind energy projects in commercial operation or under construction in 11 states with a generating capacity of nearly 2,000 megawatts.
Capistrano Wind Partners will invest in a high-quality, diversified portfolio of U.S. wind turbines projects, each of which will be acquired from EMG. All wind projects in the portfolio will have long-term power sales agreements in place with electric utilities and will be operational at the time of investment. EMG will manage and retain an equity interest in the portfolio.
Initial projects in the portfolio include the 61-megawatt Mountain Wind I project and the 80-megawatt Mountain Wind II project, both located in Wyoming, as well as the 150-megawatt Cedro Hill project in Texas. Projects to be acquired when they become operational include the 42-megawatt Crofton Bluffs project and the 80-megawatt Broken Bow project, both currently under construction in Nebraska. Capistrano Wind Partners plans to acquire additional, new wind projects from EMG in the future, with an expectation that the portfolio will initially consist of up to seven projects with a total generation capacity of approximately 500 megawatts.
Total capital committed to the new company by TIAA-CREF and CIRI is currently $460 million, which includes an up-front investment of $238 million for three operating wind projects. The balance of the commitment is expected to be invested over the next year as new projects are commercialized and acquired from EMG. The funds are paid to EMG net of certain transaction expenses.
Marathon Capital, LLC, acted as EME’s financial advisor on the transaction to form Capistrano Wind Partners, LLC, while Gibson, Dunn & Crutcher provided legal counsel.
With offices in Santa Ana, Calif., EMG manages the competitive power generation business of Edison International (NYSE:EIX), operating a portfolio of 45 electric generating sites in 13 states that are powered by wind, natural gas, biomass and coal, as well as an energy marketing and trading operation based in Boston. EMG is one of the largest developers of wind energy projects in the U.S. with a current portfolio of 31 projects in operation or under construction in 11 states with a total generating capacity of nearly 2,000 megawatts.
CIRI is an Alaska Native-owned company with diversified business interests that include energy and resource development, tourism and hospitality, telecommunications, real estate development and management, oilfield and construction services and environmental remediation services. It is one of 12 Alaska-based regional corporations established by the Alaska Native Claims Settlement Act of 1971 to benefit Alaska Natives who had ties to the Cook Inlet region. The Company is owned by more than 7,300 Alaska Native shareholders of Athabascan and Southeast Indian, Inupiat, Yupik, Alutiiq (Sugpiaq) and Aleut (Unangax) descent. It is based in Anchorage and has interests across Alaska, the lower 49 and abroad. CIRI also created a family of nonprofit service organizations that provide needed health care, housing, employment, education and other social and cultural enrichment services for Alaska Natives and others.
TIAA-CREF is a national financial services organization with $464 billion in combined assets under management (as of 12/31/11) and is the leading provider of retirement services in the academic, research, medical and cultural fields.
TIAA’s Wind Energy investments are just one of many investments of TIAA’s General Account, an account solely owned by TIAA that is not available to individual investors and whose performance is not directly allocated to any specific contract or obligation. TIAA’s General Account invests in a broad range of diversified investments to support TIAA’s contractual guarantees and business operations.
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TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.