Google and Citi have agreed to provide $204 million in order to finance part of the Alta Wind Energy Centre (AWEC), a large-scale California wind farm being built by US renewable energy developer Terra-Gen Power.
Google and Citi will each commit $102 million in financing to AWEC’s fifth phase, which is expected to generate 168 megawatts of power, according to a statement. Last month, Google and Citi each agreed to commit $55 million to the fourth phase of the project.
The investment by Google and Citi will be structured as a leveraged lease, meaning that Google and Citi will buy the projects at the start of commercial operations and then lease them back to Terra-Gen, according to a statement. The previous commitment by Google and Citi was also structured as a leveraged lease.
When completed, AWEC is expected to generate 1,550 megawatts of power, all of which has been contracted to utility Southern California Edison under a 2006 power purchase agreement, according to a statement. AWEC, located in Tehachapi, California, currently generates 720 megawatts of power, and Terra-Gen hopes to have 1,020 megawatts on line by the end of the year.
Boston-based energy investor ArcLight Capital Partners and Global Infrastructure Partners (GIP) are co-owners of Terra-Gen. GIP acquired a 40 percent stake in Terra-Gen from ArcLight in 2009.
In addition to the commitments from Citi and Google, Terra-Gen also recently announced the closing of $631 million in financing for construction of the sixth and eighth phases of AWEC, with Credit Agricole Corporate and Investment Bank and MUFG Power & Utilities Group acting as co-structuring leads and co-bookrunners for the financing.
New York-based Terra-Gen focuses on developing wind, solar and geo-thermal projects across the US, and currently has 5000 megawatts of projects under development, according to the company’s website.