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Princeton-based Clearway Energy Inc. announced June 28 that it entered into a binding agreement to acquire wind projects across three states from Capistrano Wind Partners LLC for $255 million, plus the assumption of approximately $160 million of non-recourse debt.
According to the announcement, the five utility-scale wind projects, which achieved commercial operations between 2008 to 2012, represent 413 MW of capacity and are in Texas, Nebraska and Wyoming. Capistrano is based in Wilmington, Del.
These projects sell power under purchase agreements with investment-grade entities, with contracts lasting about 10 more years. The management of these projects will continue to be provided by subsidiaries of Clearway Energy Inc.’s sponsor, Clearway Energy Group.
As part of the deal, which is expected to close in the second half of 2022, Clearway Energy Inc. also entered into a development agreement where Clearway Energy Group will pay $10 million to partially fund this acquisition for an exclusive right to develop, construct and repower those projects.
Christopher Sotos, Clearway Energy Inc.’s president and CEO, said in a statement that the development agreement “further demonstrates the strength of our sponsor by its willingness to invest alongside the Company for potential future growth.”
After factoring in estimated closing adjustments, proceeds from the rights fee, and new non-recourse debt, Clearway Energy Inc. said it expects its total long-term corporate capital commitment to acquire the Capistrano Portfolio to be approximately $110 million to $130 million, which the company expects to fund with cash on hand.
The acquisition is expected to provide incremental annual leveraged assets on a five-year average basis of approximately $12 million to $14 million beginning Jan. 1, 2023.
“The Company has now committed to or has line of sight to the future deployment of over 55% of the $750 million of excess proceeds from the Thermal sale which solidifies Clearway’s ability to achieve the upper range of our 5% to 8% annual dividend growth objective through at least 2026,” Sotos added.