Pattern Energy will purchase a 179MW interest in the 218MW Panhandle 1 wind power project in Texas from Pattern Energy Group (Pattern Development) for $125m upon the project's completion.
The acquisition is the third in a series of anticipated transactions with Pattern Development and expands Pattern Energy's portfolio to 11 wind projects with a total owned capacity of 1,434MW.
Panhandle 1 is under construction in Carson county and equipped with 118 GE 1.85MW turbines.
Pattern Energy said that the acquisition is subject to customary closing conditions and is estimated to be completed following the start of commercial operations in June 2014.
The balance of the project will be acquired from Pattern Development by two institutional tax equity investors.
Around 77% of the expected output at Panhandle 1 is contracted under a 13-year energy price hedge, with an A-/Baa2 credit-rated affiliate of Citibank, with the balance paid at ERCOT's spot market prices, the company said.
Pattern Energy president and CEO Mike Garland said that the acquisition of Panhandle 1 will increase the company's assets under management by 14%, to 11 projects, and will immediately increase its cash available for distribution.
Garland said, "Panhandle is one of the best wind sites in the US with a strong wind resource and excellent transmission capacity.In addition, when coupled with Panhandle 2, this acquisition will increase our economies of scale in the area.
"Panhandle 1 is nearly complete, making it an ideal fit with our strategy of acquiring world-class wind projects with top quality equipment that generate stable and sustainable cash flows," Garland said.
Pattern Energy has agreed to acquire the 181.7MW Panhandle 2 project in December 2013. The project will reach commercial operation in the fourth quarter of 2014.
Image: Pattern Energy to acquire Panhandle 1 wind project from Pattern Development. Photo: courtesy of Pattern Energy Group.