Innergex Renewable Energy has closed a construction financing and tax equity commitment for its Griffin Trail project, a 225 MW wind facility located in Knox and Baylor Counties, in north-west Texas.
The $276.2 million financing has been arranged with Sumitomo Mitsui Banking Corporation acting as coordinating lead arranger, and CIBC acting as joint lead arranger, backed by a $171.4 million tax equity commitment from Wells Fargo to be provided upon the commercial operation date.
“It was only a few months ago, when the U.S. Production Tax Credits deadlines were extended, that we knew we were in a strong position to bring Griffin Trail forward, and we have since made rapid progress on development and construction. Securing construction financing and tax equity commitment for this project is another milestone, and I want to congratulate all Innergex employees who contributed to this significant team effort.”Michel Letellier, president and CEO of Innergex.
Work on-site started in September and is progressing well with the operations and maintenance building and road construction well underway, and approximately 50% of foundations complete.
A construction agreement was executed with Blattner Energy and a Turbine Supply Agreement was executed for the supply of GE wind turbines totaling 225 MW with deliveries starting in January 2021.
Deliveries of long-lead items have started and the construction of the interconnection point is underway by a local transmission provider.
Total construction costs of the Griffin Trail project are projected to amount to $284.7 million and its commissioning is scheduled in Q3 2021. The power generated will be fed into the ERCOT transmission grid and sold on the spot market.
The project is expected to produce a gross estimated long-term average of 819.0 GWh per year, enough to power approximately 57,000 Texan households with clean energy, and to benefit from 100% of the US Production Tax Credits, representing $0.025, indexed to inflation, per KWh of electricity produced for the first 10 years of operations, which is comparable to power purchase agreements with similar tenors from government backed utilities in Canada.
In addition, the tax equity commitment made by Wells Fargo includes a partial pay as you go funding arrangement under which, when the actual annual MWh production exceeds a certain production threshold, the Tax Equity Investor is obligated to make a cash contribution to the Corporation.
Expected Annual Pay-go Contribution for the Griffin Trail project is $4.0 million. In total, the project should generate an annual contribution of $30.7 million when combining the projected Adjusted EBITDA Proportionate and the Pay-go Contribution.