Capital Power - CEO, Brian Vaasjo
CEO, Brian Vaasjo
Source: Edmonton Sun
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  • Alberta based energy company Capital Power (TSX:CPX) announces it has acquired Buckthorn Wind
  • Buckthorn wind is a 100.5 megawatt wind farm facility based in Texas
  • Purchase price between C$83.78 million to $96.34 million
  • Purchase 100 per cent debt financed
  • Capital Power (CPX) is trading for $25.48 per share, down 2.63 per cent with a market cap of 2.6 billion

Capital Power Corp (TSX:CPX) has today announced the purchase of the 100.5 megawatt Texas solar farm Buckthorn Wind from private investors.

The fully operational site will add a sizeable piece of renewable energy into Capital’s energy mix.

The equity price is between C$83.78 million and C$96.34 million.

The deal is contingent on the company entering into a tax equity partnership, with a tax equity balance of $94.94 million.

Buckthorn Wind has a tax equity investor that receives the tax benefits and a portion of adjusted EBITDA until the flip-date predicated to occur in the late 2020’s.

The deal is expected to close in the second quarter of this year.

Buckthorn is located in Erath County, some 60 miles South of Dallas, and began operating commercially in January 2018.

The power grid Buckthorn supplies electricity to is one of the fastest growing regions in North America, with Buckthorn located close to Dallas allowing for premium pricing to deliver baseload power.

This news comes on the back of the completion of construction at the Cardinal Point wind project, which will begin operating this week.

The construction cost of the 150 megawatt Illinois wind project is expected to fall within the original project estimates of $328 million to $342 million.

Capital Power will operate the Cardinal Point Wind farm under a 12-year fixed-price contract with an investment grade US financial institution covering 85 per cent of the facilities output.

The expected adjusted EBITDA and adjusted funds from operations in the first full year of operations is $55.7 million to $5.5 million, respectively.

A tax equity investor has also committed to the Illinois project.

Brian Vaasjo, President and CEO of Capital Power, said the Buckthorn Wind acquisition provided the opportunity to acquire a young renewable asset with a 15 year weighted average contract life remaining.

“With the addition of Cardinal Point Wind, the long-term contracts from these two new assets enhance our contracts cash flow profile and expand our renewables portfolio to approximately 1,200 megawatts with an additional 100 megawatts in advanced development from Whitla Wind 2,” he added.

Capital Power (CPX) is currently trading for $25.48 per share, down 2.63 per cent at 11:45am EST.

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