Ecofin US Renewables (RNEW), the £33m infrastructure fund that began a managed wind-down last December, has agreed to sell “Whirlwind”, its troubled 59.8MW wind project in Texas, for a maximum of $30m.
Although that is in line with the asset’s $29.9m valuation at 30 June only $12m of the payment will be upfront upon completion of the deal.
Of the remaining $18m, $11m will be held in an escrow account, subject to clawback while an interconnection issue limiting capacity is resolved.
The other $7m is an earnout that will be paid if the company replaces all the wind turbines with new more powerful ones by the end of 2027,
A portion of the escrow funds will start to be returned to the buyer from January for every MW curtailed. The buyer has 60 days of exclusivity to complete due diligence on the project that was damaged in a tornado in June 2023.
RNEW shares stand on a 41% discount to net asset value. The portfolio has three assets, the other two being two Beacon solar parks in California.
Our view
James Carthew, head of investment company research at QuotedData, said: “While I understand the desire to get on with Ecofin US Renewables’ managed wind-down, selling the Whirlwind asset before the connection issues to the Texan grid are resolved seems likely to end up with shareholders taking a big haircut on the $29.9m valuation – potentially the whole $11m escrow amount. I’d be interested to know why RNEW couldn’t have waited a few more months.”
