Duke Energy Renewables, a commercial business unit of Duke Energy (NYSE: DUK), announced plans on March 27 to sell a 50 percent stake in the 131 MW Cimarron II Windpower Project in Gray County and the 168 MW Ironwood Windpower Project in Ford County to Sumitomo. The companies will complete construction of both wind farms later in 2012.
The financing, which closed April 18, consists of a construction and term loan facility of approximately $330 million and a letter of credit facility totaling roughly $23 million. The lenders involved in the deal were Sumitomo Mitsui Banking Corp. (NYSE: SMFG), Mizuho Corporate Bank Ltd., and Bank of Tokyo-Mitsubishi UFJ Ltd.
Vinson & Elkins and Kirkland & Ellis provided legal counsel to Duke Energy Renewables and Sumitomo, respectively, during the formation of the joint venture. Chadbourne & Parke represented the joint venture partners in the financing effort. Milbank, Tweed acted as legal counsel to the lenders.
Kansas City Power & Light will purchase all of the electricity and associated renewable energy credits (RECs) produced by Cimarron II under the terms of a 20-year agreement. Westar Energy (NYSE: WR) will buy all the power and RECs produced by the Ironwood wind farm through a 20-year agreement.
Duke Energy Renewables, part of Duke Energy’s Commercial Businesses, is a leader in developing innovative wind and solar energy generation projects for customers throughout the United States. The company’s growing portfolio of commercial renewable assets includes 10 wind farms and 11 solar farms in operation in eight states, totaling more than 1,000 megawatts in electric-generating capacity. Duke Energy Renewables will complete five additional wind farms in 2012.
Sumitomo Corporation of America (SCOA) is a wholly owned subsidiary of Sumitomo Corporation (SC), a Japanese integrated trading and investment enterprise engaged in multifaceted business activities with consolidated assets of $87.8 billion. These activities include selling a variety of domestic products and services, conducting import/export and trilateral business transactions, providing domestic and international business investment, and participating in numerous other profitable activities facilitated by its global network and the relationships of trust built with corporate business partners and consumers in various industrial sectors around the world. With a 400 year history, the Company continues its efforts in conservation for the environment through its renewable energy activities.