Ecofin US Renewables Infrastructure (RNEW) has announced that it has contractual commitment to acquire Whirlwind, a 60 MW operating wind asset, for US$49m. The purchase price will be funded by a combination of the remaining net proceeds from the IPO and from the newly established Revolving Credit Facility. The acquisition of Whirlwind is expected to complete before the end of October (once its existing project lender has released its liens concurrent with the debt being fully repaid as part of the acquisition), and this will fully deploy RNEW’s IPO proceeds.
Whirlwind is a proven operating wind asset, located in Texas, that was placed in service in December 2007. The site has 26 Siemens 2.3 MW wind turbine generators with operations and maintenance performed by Siemens Gamesa under a long-term service and maintenance agreement. Whirlwind benefits from a fixed-price power purchase agreement with an investment grade electric utility that has over 6 years remaining on the initial contract term, providing predictable cash flow. RNEW says that Texas, is experiencing sustained growth in electricity demand due to population growth and corporations migrating to this business-friendly state. With electricity prices linked to natural gas prices, which have been rising, these factors provide a good backdrop for re-contracting in the future and potential for inflation protection.
Acquisition portfolio impact
With the inclusion of Whirlwind, RNEW’s portfolio will have a weighted average remaining revenue contract term of approximately 17 years. It will provide additional diversification to RNEW’s existing solar portfolio in terms of technology, its proven wind resource, and location in the central U.S. Moreover, RNEW says that Whirlwind is expected to add incremental distributable cash flow to it immediately.