Duke Energy’s (NYSE: DUK) commercial renewable business and the U.S. branch of a Japanese company have finalized their 50-50 ownership arrangement for two Kansas wind power units and secured about $353m in financing for construction and operating costs.
Duke and Sumitomo Corp. of America (the U.S. subsidiary of Sumitomo Corp.) announced the deal April 26 in a news release.
Duke Energy Renewables had said in March that it plans to sell a 50% stake in the 131-MW Cimarron II Windpower project in Gray County and the 168-MW Ironwood project in Ford County to Sumitomo. The companies will complete construction of both wind farms later this year.
Both the Cimarron II and Ironwood projects have long-term contracts in place to sell the electricity they generate.
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.
KCP&L is part of Great Plains Energy (NYSE: GXP).
The financing, which closed April 18, consists of a construction and term loan facility of roughly $330m and a letter of credit facility totaling roughly $23m.
The lenders involved in the deal were Sumitomo Mitsui Banking Corp., 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.
Duke’s renewable business has a portfolio that includes 10 wind projects and 11 solar units operating in eight states. The fleet represents more than 1,000 MW in generating capacity.