Alterra works on financing for Canada hydro, Texas wind projects

Alterra Power Corp. (TSX: AXY) said Nov. 12 in its third-quarter earnings statement that it has worked out new financing for the Jimmie Creek hydroelectric project in British Columbia, Canada.

The company successfully closed a C$176.5m non-recourse loan facility on Oct. 14. The facility is priced at a fixed rate of 5.26% and will amortize over 40 years commencing at commercial operations (expected in the third quarter of 2016), except for the final 10% of principal which will be paid at maturity.

Upon closing the project financing, the company and its partner Fiera Axium Infrastructure Inc. formed the Jimmie Creek Limited Partnership under which they now jointly own the project at 51% and 49% shares respectively.  At financial closing, Alterra received proceeds of C$22.9m as a refund of certain development and construction expenses previously paid by Alterra. Alterra does not expect to make any further equity contributions towards the construction of Jimmie Creek, which is now being funded by project financing proceeds and contributions from Fiera Axium.

At Jimmie Creek, road, bridge and camp construction is 100% complete, and work is well underway at the intake and powerhouse locations. Penstock installation is 30% complete. Excavation at all project sites is progressing well and is completed at the powerhouse, nearly complete at the switchyard and well underway at the intake. In October the temporary river diversion channel at the intake was completed. Commencement of commercial operations is targeted for July 1, 2016.

The Jimmie Creek project will provide 62 MW of clean power and will sell 100% of its power to BC Hydro for 40 years beginning in August 2016.

As for its Shannon wind farm project in Clay County, Texas, Alterra said it is currently working to finalize terms with several financing parties and now expects to close construction financing in the first quarter of 2015. Project design is nearly complete, and the company is finalizing all remaining project contracts (construction, turbine supply, operation and maintenance, etc.). The company expects to own up to 50% of the 202.4-MW project in partnership with a large energy infrastructure fund.

John Carson, Alterra’s CEO, said: “With the completion of our holdco financing, we’ve delivered on our promise to meet all our capital needs at low cost and without diluting shareholders. Meanwhile the Jimmie Creek construction is proceeding on time and on budget, and the Shannon wind project is close behind it. We are now fully into our next growth phase, supported by our existing operations which are running at 100% of target.”

Alterra Power operates six power plants totaling 568 MW of generation capacity, including British Columbia’s largest run-of-river hydro facility and largest wind farm, two geothermal facilities in Iceland, and a geothermal plant in Nevada. Alterra owns a 262 MW share of this capacity.

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.