OAKVILLE, ONTARIO--(Marketwired - Sept. 4, 2014) - Algonquin Power & Utilities Corp. ("APUC") (TSX:AQN) today announced an agreement to acquire a construction stage 200 MW wind project in the United States.
The Odell wind power project ("Odell") is located in Cottonwood, Jackson, Martin, and Watonwan Counties in Minnesota and is being constructed on approximately 23,000 acres of land leased from a wind power supportive land owner group. The project will utilize proven turbine technology comprised of 100 Vestas V110-2.0 wind turbines and is scheduled to be commissioned in the fourth quarter of 2015. Odell has a 20 year power purchase agreement with a subsidiary of Xcel Energy, a diversified utility operating in the Midwest with an investment grade credit rating (S&P: A-, Moodys: A3), and is estimated to generate 816.6 GW-hrs annually. Project construction costs are estimated to be approximately U.S. $313.5 million.
Concurrently, APUC announced that in connection with the Odell project, Emera Inc. ("Emera") has agreed to subscribe to a private placement of subscription receipts convertible into 7,865,170 APUC Common Shares, subject to regulatory approval, for total proceeds of approximately $70.0 million. Proceeds of the subscription receipts will be used to partially fund the acquisition and completion of Odell.
The Odell project qualifies for U.S. renewable energy production tax credits and it is expected that tax equity investors will provide approximately U.S. $190.8 million of equity financing toward project costs. The balance of the permanent financing will be arranged through APUC's power generation subsidiary's investment grade bond platform.
"There is significant demand for renewable energy in the U.S. and the investment in Odell is one of several near term opportunities that we see for accretive growth. The project further strengthens and diversifies our renewable energy generation portfolio with a 20 year power purchase agreement and a strong wind regime in a new geographic region", commented Chief Executive Officer Ian Robertson. "We are also pleased with Emera's continued financial and strategic support of APUC through a private placement of subscription receipts that underpin our growth initiatives."
This news release does not constitute an offer to sell or the solicitation of any offer to buy, nor will there be any sale of these securities, in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such province, state or jurisdiction.
About Algonquin Power & Utilities Corp.
Algonquin Power & Utilities owns and operates a diversified $3.6 billion portfolio of regulated and non-regulated utilities in North America. The regulated utility business provides water, electricity and natural gas utility services to 485,000 customers through a portfolio of regulated generation, transmission and distribution utility systems. The non-regulated electric generation subsidiary owns or has interests in renewable energy and thermal energy facilities representing more than 1,100 MW of installed capacity. Algonquin Power & Utilities delivers continuing growth through an expanding pipeline of renewable power and clean energy projects, organic growth within its regulated utilities and the pursuit of accretive acquisition opportunities. Common shares and preferred shares are traded on the Toronto Stock Exchange under the symbols AQN, AQN.PR.A and AQN.PR.D. Visit Algonquin Power & Utilities at www.AlgonquinPowerandUtilities.com and follow us on Twitter @AQN_Utilities.
Caution Regarding Forward-Looking Information and non-GAAP Financial Measures
Certain statements included in this news release contain information that is forward-looking within the meaning of certain securities laws, including information and statements regarding prospective results of operations, financial position or cash flows. These statements are based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions based on historical trends, current conditions and expected future developments. Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. APUC cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking statements. Material risk factors include those set out in the management's discussion and analysis section of APUC's most recent annual report, quarterly report, and APUC's Annual Information Form. Given these risks, undue reliance should not be placed on these forward-looking statements, which apply only as of their dates. Other than as specifically required by law, APUC undertakes no obligation to update any forward-looking statements or information to reflect new information, subsequent or otherwise.