Doral signs 480-MW Indiana solar PPA with AEP, gets investment

Solar power station. Featured Image: worradirek/Shutterstock.com

May 4 (Renewables Now) - AEP Energy, a subsidiary of American Electric Power (NASDAQ:AEP), has signed a power purchase agreement (PPA) for the 480-MW direct current (DC) first phase of the Mammoth solar project in Indiana with the project's developer, Global Energy Generation LLC (Doral LLC), it was announced on Monday.

At the same time, Doral LLC has secured an investment of about USD 355 million (EUR 296m) from Israeli insurance company and pension manager Migdal Insurance.

The 1.65-GW DC Mammoth project is being developed in Starke and Pulaski counties in northern Indiana. The long-term procurement deal for Mammoth Solar 1 is described as one of the largest solar PPAs in the PJM market.

Mammoth Solar 1 is expected to move into construction in the fourth quarter of 2021 and become operational by the second quarter of 2023.

Its developer, Doral LLC is the entrepreneurial platform of Doral Renewable Energy Resources Group Ltd in the US, set up by Israel's Doral Group (TLV: DORL) and Clean Air Generation LLC.

The company's deal with Migdal Insurance includes an investment of about USD 110 million in exchange for a 20% stake in Doral LLC. Most of the sum will be invested at closing and the remainder is subject to milestones.

Migdal Insurance will also invest an estimated USD 100 million in the first stage of the Mammoth project. Doral LLC will keep a majority holding and control of the project.

The insurer will further provide a loan of USD 130 million to Doral LLC.

The funding deal is still being formulated and is subject to the signing of detailed transaction documents and due diligence. According to Doral's announcement, the investment may be expanded with hundreds of millions of dollars in the foreseeable future as more projects mature.

"Migdal has an option for additional financing that may reach an additional USD 300 million, thus, a total investment of USD 600 million in the first phase of this partnership," said Guy Fischer, head of Migdal Insurance's investment division.

Doral Group chief executive Yaki Noyman sees the strategic partnership with Migdal Insurance as adding significant growth opportunities for Doral, "especially now as the Biden Administration's new infrastructure programme will provide a boost to the US renewable energy sector."

(USD 1.0 = EUR 0.833)

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Plamena has been a UK-focused reporter for many years. As part of the Renewables Now team she is taking a keen interest in policy moves.

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