Algonquin Power & Utilities Corp. (“APUC”) (TSX: AQN) today announced that a subsidiary of APUC’s renewable power generation business Algonquin Power Co. (“APCo”) has entered into an agreement to acquire the remaining 40% of the 400 MW wind power portfolio (the “Projects”) in the United States from Gamesa Wind US, LLC (“Gamesa”) for total consideration of approximately US$117 million.
APUC currently holds a 60% controlling interest in the Projects which were originally acquired through a newly formed partnership whose original members included APCo, Gamesa and certain tax equity investors. The 400 MW wind portfolio consists of three facilities, Minonk (200MW), Senate (150MW), and Sandy Ridge (50MW) located in the states of Illinois, Texas, and Pennsylvania, respectively.
APUC has been the majority owner and manager of the Projects since 2012 when commercial operation was achieved, therefore no additional ongoing management or administrative costs are expected to be incurred. Gamesa will continue to provide operations, warranty and maintenance services for the wind turbines and balance of plant facilities under 20 year contracts.
Funding of the acquisition is expected to be consistent with APUC’s targeted investment grade consolidated capital structure of approximately 50% equity, 50% debt. The acquisition is expected to close early in 2014 following regulatory approvals.
Substantially all of the energy from the Projects is sold under fixed price power sales contracts including long term hedge agreements with a remaining weighted average life of 11 years; ancillary services including capacity and renewable energy credits are contracted into the energy markets in which the facilities are located.
“The U.S. power markets provide tremendous opportunities for further growth in our power generation portfolio as our investment in these wind farms has demonstrated”, commented Chief Executive Officer Ian Robertson. “We have been pleased with the performance of these assets over the past year and the acquisition of the balance of these three wind generating facilities adds additional accretive, low risk earnings and cash flow to APUC”.
Algonquin Power & Utilities Corp. owns and operates a diversified