US-based independent power company Pattern Energy Group has entered into an agreement to divest its operations in Chile to affiliates of Arroyo Energy Investors for $67m.
The Chile operations primarily comprise Pattern Energy’s 81MW owned interest in the 115MW El Arrayán wind power project.
With the sale completion, the company expects to eliminate more than $1m of annual overhead related to managing its business in the country.
Pattern Energy Group chief executive officer Mike Garland said: “The sale of El Arrayán Wind is an excellent result for us. The price represents a 30% uplift over El Arrayán Wind’s contribution to the company’s current value.
“While the purchase price demonstrates material embedded value in our assets, the primary reason for the sale was strategic.
“Chile was a good candidate for sale as it was one of the higher cost operations in our fleet because of the distance from the rest of our operations and the different legal, tax and regulatory environments.”
Garland further said that the proceeds of the divestiture are expected to either make further accretive investments, pay down debt, buy back stock or support other corporate purposes.
Subject to customary closing conditions, the current transaction is expected to conclude within three months.
Located nearly 400km north of Santiago on the coast of Chile, the El Arrayán Wind project began commercial operations in the second quarter of 2014.
In June 2014, Pattern Energy Group acquired 38.5% net ownership interest in the El Arrayán Wind project.
To date, nearly 70% of the power generated by the facility is contracted for sale through a long-term fixed-for-floating hedge with Minera Los Pelambres.
Built on approximately 15,320 acres of coastal land, the El Arrayán power plant connects to the Sistema Interconectado Central’s 220kV transmission system.