July 3 (Renewables Now) - Innergex Renewable Energy Inc (TSE:INE) has purchased a 250-MW ready-to-be-built solar project in Texas, which it says is its largest photovoltaic (PV) project to date.
The Canadian renewable power producer said on Monday that it has secured full notice to proceed with the construction phase and will aim to launch commercial operations at the plant in the third quarter of next year. Financial close for the project’s non-recourse construction, term debt and tax equity financing was achieved on Monday. Innergex bought the asset from Longroad Energy Partners LLC for an undisclosed sum.
The USD-397-million (EUR 341m) Phoebe solar project in Texas’ Winkler county will use First Solar’s (NASDAQ:FSLR) Series 6 thin-film PV modules that are expected to produce an average of 738,000 MWh of power annually. The plant’s entire output will be sold to the Electric Reliability Council of Texas (ERCOT) market. Around 89% of the electricity will be sold at a fixed price as part of a 12-year off-take deal with Shell Energy North America, starting in July 2019, while the remaining power will be sold at merchant market prices. Associated Renewable Energy Certificates (RECs) will be sold at the merchant market.
First Solar will take care of the PV park’s operation and maintenance (O&M) under a five-year contract.
“With this acquisition, we are in a good position to provide peak renewable power to the ERCOT market, complementing wind energy production and diversifying our footprint in the state,” said Michel Letellier, president and CEO of Innergex. He added that the deal will help the company to exceed its goal of having 2,000 MW of net installed power generation capacity by 2020.
Construction costs for the Phoebe solar farm will be financed through a USD-292-million construction and long-term debt facility from CIT Group Inc (NYSE:CIT). Innergex will make a USD-105-million equity investment in the scheme, which is eligible for a 30% federal Investment Tax Credit (ITC) support.
According to the Canadian firm, the project will bring an adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of around USD 20.2 million for a 12-month operational period.
(USD 1.0 = EUR 0.858)