TransAlta Renewables, through a wholly-owned subsidiary of TransAlta, will buy a 144MW wind farm in Wyoming, US, from an affiliate of NextEra Energy Resources for $102m, which will be funded through a loan from TransAlta.
The wind farm, which is currently fully operational, will sell its output under a long-term power purchase agreement (PPA) until 2028.
TransAlta Renewables expects to repay the borrowed amount with a free cash flow from operations over the first three years and through a long-term debt refinancing, which is expected to be completed in conjunction with its other financing needs.
TransAlta president and CEO Dawn Farrell said that the acquisition marks TransAlta’s first wind project in the Western US and aligns with the company’s strategy of growing its renewables platform and diversifying its presence in the region.
"It positions us well for future opportunities in the US wind space and demonstrates the benefits of creating TransAlta Renewables," Farrell added.
The deal is subject to regulatory approvals and is expected to be completed by the end of December 2013.
It is expected to add between 2-3% to TransAlta Renewables’ cash available for distribution per share.
At the close of the transaction, TransAlta Renewables will acquire the economic interest in the wind farm from TransAlta for a payment equal to the original purchase price of the acquisition.
