PFR is pleased to announce the finalists for its 14th Annual Deal of the Year awards. Here is the short list for North America Renewable Project Finance Deal of the Year.
North American project finance was such a competitive category this year, we decided to subdivide it into renewables and conventional generation, with an additional category for LNG projects across the Americas. The renewables category was the most competitive of all, with a wealth of innovative deal structures being deployed.
The finalists in this category are:
- Apex Clean Energy's Cotton Plains wind and solar portfolio financing,
- Falvez Energy's Astra merchant wind project financing,
- ArcLight Capital Partners' financing of its acquisition of of a U.S. wind portfolio from Infigen Energy and
- First Reserve's financing of its Mariah North wind project and associated transmission line.
Apex Clean Energy’s Cotton Plains portfolio
In January 2016, the Defense Logistics Agency on behalf of the U.S. Army signed a power purchase agreement with Apex for the output of its Cotton Plains wind and Phantom solar projects in Texas. By July, the sponsor had sealed a $330 million construction loan, a $300 million tax equity commitment and $50 million of back leverage for a portfolio comprising those two projects and a third wind project called Old Settler. Old Settler’s generation will be sold spot with the support of a 10-year proxy revenue swap provided by Allianz Risk Transfer. Read our coverage here.
CohnReznick Capital Markets advised Apex on the financing, which included equity from North Leaf Capital Partners, debt arranged by Deutsche Bank and tax equity commitments from JP Morgan, US Bank and Tyr Energy. Akin Gump advised Northleaf of the transaction. Chadbourne & Parke was Deutsche Bank’s legal counsel and also advised Allianz Risk Transfer on its innovative hedge project.
Falvez Energy’s Astra wind project
Falvez Energy secured a $129 million construction loan and tax equity commitment in September for its 163 MW Astra wind project in the Texas panhandle. What made the transaction unusual was that the project had no power purchase agreement and no hedge in place, leading one deal watcher to claim it was the “first ever tax equity financing for a 100% merchant wind project". The decision to go merchant was based on low hedge pricing and potential curtailment issues. Read our coverage here.
Marathon Capital advised Falvez on the financing. GE Energy Financial Services provided the construction loan and 50% of the tax equity. BNP Paribas provided the remaining 50% of the tax equity, marking the bank’s first deployment of its own capital in a renewable tax equity transaction in more than 18 months (PFR, 9/30). Akin Gump and Chadbourne & Parke advised the sponsor and Mayer Brown advised the lender.
ArcLight Capital Partners’ Leeward wind portfolio
In July 2015, ArcLight Capital Partners agreed to acquire Sydney-based Infigen Energy’s U.S. wind portfolio for $257 million as the Australian sponsor prepared to exit the U.S. market (PFR, 7/16/15). Renamed Leeward by ArcLight, the portfolio comprises 18 mostly contracted, operating projects totaling 1,560 MW across nine U.S. states. ArcLight refinanced the assets in July 2016 with $256 million of five-year, back-levered, senior secured debt from seven banks. The deal was structured to provide the sponsor with the flexibility to jettison or add projects and included a $50 million accordion feature which was used later in the year.
Crédit Agricole and Santander were coordinating lead arrangers. KeyBank was joint lead arranger. ING Capital, Wells Fargo, MUFG and Siemens Financial Services participated in a post-closing syndication in October. Latham & Watkins advised the sponsor and Winston & Strawn advised the lenders.
First Reserve’s Mariah North wind project
Deal watchers have described the financing of First Reserve’s 230 MW Mariah North wind project and an associated 1 GW transmission line in Texas as the first of its kind. While the wind project was supported with a hedge and financed with a construction loan, tax equity and back leverage, the transmission line was financed separately by Hannon Armstrong through a sale-leaseback arrangement, involving complex inter-creditor agreements. In total, the sale and four separate financings had to close simultaneously in February 2016.
Citibank provided the hedge, the construction loan and a portion of the tax equity. BHE Renewables provided the remaining tax equity. CIT Bank provided the back-leverage. Winston & Strawn advised First Reserve, Chadbourne & Parke advised the lenders, Milbank Tweed advised BHE Renewables, Morrison & Foerster advised Hannon Armstrong, Skadden advised a joint venture between Arctus Capital Group and Brightman Energy, which developed, sold and is the residual owner of the transmission line, and Sidley Austin advised Citi in its capacity as the hedge provider.
Click here to see the other categories or here to vote in the survey.
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