Innergex Renewable Energy has closed its construction funding and tax equity contribution to its Griffin Trail project, a 225 MW wind farm located in Knox and Baylor Counties, in northwest Texas.
The $276.2 million in funding was provided by Sumitomo Mitsui Banking Corporation, acting as Coordinating Lead Arranger, and CIBC, acting as Joint Lead Arranger, with a $171.4 million tax-equity contribution from Wells Fargo to be made available on the date of commercial service.
“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 well underway in the operation and maintenance of road and road building, and approximately 50 percent of the foundations have been completed. A development agreement was concluded with Blattner Energy and a turbine supply agreement was concluded for the supply of GE wind turbines totaling 225 MW, with deliveries beginning in January 2021. Delivery of long-lead products has begun and the local transmission company is in the process of building the interconnection point.
The overall construction cost of the Griffin Trail project is estimated to be $284.7 million and its commissioning is scheduled for Q3 2021. The generated power will be fed into the ERCOT transmission grid and sold on the spot market.
The project is expected to generate a gross projected long-term average of 819.0 GWh per year, enough to power approximately 57,000 Texan households with renewable energy, and to benefit from 100 percent of US Production Tax Credits (PTCs), representing $0.025, indexed to inflation, per KWh of electricity generated for the first 10 years of operation, which is equivalent to the power purchase agreement. Griffin Trail is expected to produce a projected Adjusted EBITDA of $4.5 million and a projected Adjusted EBITDA Proportionate with PTCs of approximately $26.7 million per year on average over the first five years of service.
In addition, the tax-equity commitment made by Wells Fargo involves a partial pay-as-you-go financing scheme under which, when the real annual MWh production reaches a certain production level, the Tax Equity Investor is obliged to make a cash payment (Pay-go Contribution) to the Company. The estimated annual contribution for the Griffin Trail project is $4.0 million. In total, the project is expected to achieve an annual profit of $30.7 million by comparing the estimated Adjusted EBITDA Proportionate and the Pay-go Contribution.