GIP renewable subsidiary closes $630m financing

The financing will be used to support construction costs for two 150-megawatt California wind farms being built by Terra-Gen Power.

Terra-Gen Power, a US renewable energy developer co-owned by Global Infrastructure Partners (GIP) and ArcLight Capital Partners, has closed $631 million in construction financing for two wind energy projects.

The two projects, which will have a total output of 300 megawatts of power, represent the sixth and eighth phases of the Alta Wind Energy Centre (AWEC), a large-scale wind park that currently has capacity of 720 megawatts.  AWEC, located in Tehachapi, California, aims to generate 1550 megawatts of power, all of which is contracted to utility Southern California Edison under a 2006 power purchase agreement, according to a previous statement.

Credit Agricole Corporate and Investment Bank and MUFG Power & Utilities Group were co-structuring leads and co-bookrunners for the financing of Alta VI and Alta VIII, according to a statement. ING Capital, Rabobank, Santander, and RBS Securities acted as joint lead arrangers. Bank of Montreal, CoBank, Helaba, Key Bank, Lloyds, and DZ Bank were also included in the lender group.

Terra-Gen said in a statement that syndication of the loan had been “significantly” oversubscribed and had received interest from a range of commercial lenders.

The financing will be used to support construction and to reimburse ArcLight and GIP for funds advanced for the development of the two projects, the statement said.

In 2009, GIP acquired an approximately 40 percent stake in Terra-Gen from ArcLight in the form of convertible preferred shares.

GIP’s preferred interest was converted into common equity last July, following the close of financing and commencement of construction for the first five phases of AWEC, according to a source familiar with the transaction.

Last month, Citi and Google announced that they had each committed $55 million in financing to the Alta IV wind energy project.

Terra-Gen is a New York-based developer of wind, solar and geothermal energy projects. The company currently has 5000 megawatts of renewable energy projects under development, according to a statement.