Jun 27 2014
Pattern Energy Group Inc. ("Pattern Energy") today announced the acquisition of AEI's 38.5% net ownership interest in the El Arrayán Wind project. The project, which was completed earlier this month and is now fully operational, is located approximately 400 km north of Santiago on the coast of Chile.
At 115 megawatts (MW), El Arrayán Wind is the largest wind power facility in Chile and all of South America. The transaction increases Pattern Energy's ownership in El Arrayán Wind to 70% with Antofagasta Minerals SA ("AMSA") owning the remaining 30% minority stake.
Acquisition Highlights
- Adds 44 MW to the portfolio, bringing Pattern Energy's owned capacity to 1,479 MW
- Increases ownership to a controlling stake and enhances the platform for future growth in Chile
- Accretive acquisition contributes to Pattern Energy's target of 10-12% average annual growth in cash available for distribution (CAFD) per Class A share over the next three years[1]
- Asset acquired at a 10-11x run rate CAFD multiple
"With this acquisition we are increasing our cash flow from the project while expanding our platform in the Chilean market which has a strong, stable economy and a growing demand for renewable resources," said Mike Garland, CEO of Pattern Energy. "By harnessing Chile's strong coastal winds, El Arrayán will be the largest producer of wind power in South America, helping Chile meet its goal of generating 20% of its energy from renewable sources by 2025."
Pattern Energy paid a $45.25 million purchase price to AEI from available cash on hand and assumed certain obligations, consisting principally of AEI's proportional share of project debt. As of May 31, 2014, AEI's proportional share of the $224.8 million non-recourse project debt was $87 million.
Pattern Energy operates the project, which sells approximately 70% of its output to Minera Los Pelambres through a long-term fixed-for-floating hedge. The project sells its remaining output into the Chilean spot market at the prevailing market price at the time of sale. In addition to its minority interest in the project, AMSA is the controlling party of Minera Los Pelambres, El Arrayán connects to the Sistema Interconectado Central's 220kV transmission system. The project is located on approximately 15,320 acres of coastal land on a long-term lease with a single landowner.
According to statistics from the International Energy Agency, the World Bank and the U.S. Energy Information Administration, compared to generation from a coal-fired power plant, the electricity produced annually by El Arrayán Wind will offset more than 300,000 metric tons of carbon dioxide, the equivalent to the annual carbon footprint of an estimated 70,000 Chileans, and will conserve enough water to meet the needs of more than 11,000 Chileans.
[1] This forward looking measure of CAFD is a non-GAAP measure that cannot be reconciled to net cash provided by operating activities as the most directly comparable GAAP financial measure without unreasonable effort. A description of the adjustments to determine CAFD can be found on page 71 of our 2013 Annual Report on Form 10-K.