Capital Power has announced that it has entered into an agreement to acquire a 100% ownership interest in Buckthorn Wind, a 100.5MWwind farm, from private investors. The equity purchase price is between US$60 million and US$69 million pending the realisation of future market performance and entering into the tax equity partnership with a tax equity balance of US$68 million.
The transaction will be 100% debt financed and is expected to close in the second quarter of 2020. Buckthorn Wind is located in Erath County, approximately 60 miles south of Dallas, Texas and began commercial operations in January 2018. Buckthorn Wind has two offtake arrangements with an investment grade U.S. financial institution involving a 20-year contract for differences (CfD) for 55% of the generation output, and a 13-year financial hedge for the remaining 45% of the output. Buckthorn Wind utilises 29 Vestas turbine generators and has a service and maintenance agreement with Vestas. Capital Power expects to assume the Operations Manager role in early 2021 to replace the current third party Operations & Maintenance Services Agreement.
In addition, the construction of Capital Power’s Cardinal Point Wind project has been completed on-schedule and will soon begin commercial operations. The construction cost of the 150MW wind project located in Illinois is expected to be within its projected total cost of US$236 million to US$246 million. Capital Power will operate Cardinal Point Wind under a 12-year fixed price contract with an investment grade U.S. financial institution covering 85% of the facility’s output. The expected adjusted EBITDA and adjusted funds from operations (AFFO) in the first full year of operations is US$40 million and US$4 million, respectively. A tax equity investor is committed to the project.