Clearway Energy Inc (NYSE:NYLD) will invest USD 111 million (EUR 98.8m) to repower two wind farms in Texas with a combined capacity of 283 MW.
The repowering initiative will be made possible through binding equity commitments by Clearway Energy into an existing partnership with Clearway Group, the renewable and conventional generation company, previously known as NRG Yield Inc, said on Monday. The specific assets that will benefit from these agreements are the 161-MW Wildorado wind farm in Vega and the 122-MW Elbow Creek wind park in Howard County.
According to the statement, the partnership has entered into a tax equity arrangement that will be used together with Clearway Energy’s equity investment to repay construction debt and costs related to the repowering, as well as to remove the Wildorado project from a collateral package. The move will in turn cut the outstanding principal of that package’s existing project debt.
The two wind power plants will be repowered with Siemens Gamesa hardware that will extend their lifetime and lower operational and maintenance costs. Clearway Group will be responsible for all aspects of the construction, expecting the plan to bring it an average of USD 12 million in annual asset cash available for distribution (CAFD) from 2020 onwards.
The Wildorado park is operating under a power purchase agreement with utility Xcel Energy (NASDAQ:XEL) running through 2027. Most of the Elbow Creek plant’s output, meanwhile, will be sold under a new hedging arrangement with an investment-grade bank, which extends the project’s PPA through 2029 from 2022.
The equity transaction is expected to be completed by end-2019, while the investment is subject to customary closing conditions and regulatory approval.
(USD 1.0 = EUR 0.890)
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