The project is owned by Concord Pacific Group who will make an equity investment of approximately $19m in the development of the project. Total capital investment for the project is expected to be $67.5m.
In addition to the $19m of equity investment, the project costs will be financed with $31m of senior debt provided by Integrated Private Debt Fund II LP and $17.5m of senior and subordinated debt provided by Algonquin Power (APCo).
APCo will provide services to and will receive fees for the development, construction, operation and supervision of the project.
In addition, APCo has been granted an option to subscribe for a 75% equity interest in the project in exchange for its subordinated debt commitment, exercisable five years following commissioning of the project.
Red Lily I, initially developed by Gaia Power, will consist of 16 Vestas V82 wind turbine generators, which have been procured and are awaiting shipment from a Canadian storage location.
The power purchase agreement with SaskPower is for 25 years and includes a 2% annual increase throughout the term of the agreement. Commissioning of the project is expected to occur in early 2011.
In addition to the effort focused on completing Red Lily I, APCo, together with the owner, has secured additional land rights for a second phase of the project, which, should it proceed, will provide an additional 106MW of generating capacity, the company said.
Ian Robertson, CEO of APUC, said: “The construction of Red Lily I demonstrates APUC’s continuing contribution to the clean, renewable energy business and reinforces APUC’s strategic focus on increasing earnings per share which will contribute to growing dividends and capital appreciation for our shareholders.”
