Enel Green Power North America, (EGPNA), acting through its subsidiary Red Dirt Wind Holdings, has signed a tax-equity agreement worth approximately $340 million with MUFG and Allianz Renewable Energy Partners of America. The contract is for the Red Dirt wind project located in Oklahoma, which has a total installed capacity of about 300 MW.
Under the agreement, MUFG and Allianz will pay the above amount to the wind farm owner, Red Dirt Holdings, purchasing 100% of “Class B” equity interests in the project. This interest will allow the two investors to obtain, under certain conditions set by U.S. tax laws, a percentage of the fiscal benefits of the Red Dirt wind project.
In turn, EGPNA, through Red Dirt Holdings will retain 100% ownership of the “Class A” interests and, therefore, management control of the project.
The agreement secures the funding commitment by the two investors, while the closing of the funding is expected upon the start of commercial operation of the Red Dirt wind farm. The tax equity partnership will be supported by a parent company guarantee from Enel S.p.A.
The Red Dirt wind project, whose construction started in April, is expected to begin operations by the end of 2017. The investment in Red Dirt amounts to about $420, which is part of the investment outlined in Enel’s current strategic plan.
Once fully up and running, Red Dirt will be able to generate approximately 1,200 GWh of renewable energy annually, which is equivalent to the energy consumption needs of more than 97,000 U.S. households, while avoiding the emission of about 860,000 tons of CO2 each year.
The energy and renewable energy credits generated from Red Dirt will be sold under two long-term agreements, with T-Mobile USA, for 160 MW, and with the Grand River Dam Authority for 140 MW of the wind facility.
EGPNA is a leading owner and operator of renewable energy plants in North America with projects operating and under development in 23 U.S. states and two Canadian provinces. EGPNA operates around 100 plants with a managed capacity exceeding 3.3 GW powered by renewable hydropower, wind, geothermal, and solar energy.
Filed Under: News, Projects