Enel, GE line up financing for 250-MW Buffalo Dunes wind project

Enel Green Power North America Development (EGPD) and EFS Buffalo Dunes, a GE Capital subsidiary, signed a capital contribution agreement with a syndicate led by J. P. Morgan on a wind project in Kansas.

The syndicate commits to fund approximately $260m for the 250-MW Buffalo Dunes Wind Project in Grant, Finney and Haskell counties, Kansas. The syndicate also includes Wells Fargo Wind Holdings, Metropolitan Life Insurance and State Street Bank and Trust, said a July 9 Enel announcement.

The syndicate is expected to contribute funds in the fourth quarter of 2013, subject to fulfillment of requirements outlined in the capital contribution agreement, at which point a tax equity agreement for the Buffalo Dunes project will be signed by the parties. The project is supported by a long-term power purchase agreement.

EFS Buffalo Dunes currently holds a 51% equity stake in the wind project, while EGPD holds the remaining 49%. EGPD has an option to purchase an additional 26% of the project from EFS Buffalo Dunes on specific dates in 2013 and 2014.

Francesco Starace, Enel Green Power’s CEO, stated: “We are extremely pleased with the closing of this agreement, which further demonstrates EGP commitment to Kansas and North America as a whole. A market in which we started off with a small hydro portfolio and where we have now expanded across all generation technologies, from solar to wind, from hydro to geothermal and biomass. We are planning to further expand our installed capacity in the country, continuing to leverage on our multi-technology approach as well as maintaining high quality standards supported by innovative technologies and a sound commercial strategy.”

Tax equity agreements under US law allocate tax benefits from renewable energy generation companies to passive investors. Under the tax equity agreement with the J. P. Morgan-led syndicate, the approximately $260m will be contributed by the syndicate to the Buffalo Dunes project in return for an equity interest with limited voting rights. This equity interest will allow the syndicate to obtain a percentage of the fiscal benefits attributed to the Buffalo Dunes project.

The agreement is guaranteed by EGP-NA’s parent company Enel Green PowerEnel Green Power is the Enel Group company fully dedicated to the development and management of renewable energy sources at the international level, with operations in Europe and the Americas. The company has an installed capacity of 8,000 MW from a mix of sources including wind, solar, hydroelectric, geothermal, and biomass. Currently, EGP has over 700 operational plants in 16 countries in Europe and the Americas.

Contractor Renewable Energy Systems Americas (RES Americas) said April 18 that it has started construction on the 250-MW Buffalo Dunes Wind Project in Kansas. The project was developed by Kansas-based TradeWind Energy LLC, and is jointly owned by the GE Energy Financial Services unit of General Electric (NYSE: GE) and Enel.

The Buffalo Dunes Wind Project will use 135 GE turbines. Alabama Power, a unit of Southern Co. (NYSE: SO), will buy most of the electricity from the project under a 20-year agreement.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.