GE, Plutonic rescue bankrupt wind project

General Electric’s energy investments arm has joined with a Canadian clean energy company to rescue a bankrupt wind farm development in British Columbia through a C$227.5 million (€146.7 million; $214.5 million) recapitalisation. The 300 megawatt Dokie Wind Project, British Columbia’s largest wind farm, will now resume construction.

Dokie: back on again

General Electric’s Energy Financial Services unit and Vancouver-based Plutonic Power Corporation each contributed C$26.25 million in equity to purchase Dokie, located 1,100 kilometers northeast of Vancouver. The remaining C$175 million came in the form of 20-year non-recourse debt from a group of lenders arranged by the Manufacturers Life Insurance Company, a Canadian insurer.

The seller, EarthFirst Canada, a start-up developer of renewable energy plants, entered bankruptcy protection in November 2008 and since then has been selling off its assets, many of which consist of development-state wind farms such as Dokie.

Work stopped on Dokie’s first-phase 144 megawatt development after only five of 48 turbines were erected, as EarthFirst did not have the money to complete the project. EarthFirst was able to get a C$212 million senior credit commitment from WestLB in February 2008 to partially fund the project’s construction. But that amount proved to be inadequate once project costs escalated from C$325 million to C$360 million a few months later.

Construction on Dokie will now resume and is expected to be complete by late 2010 or early 2011. It already has all the required regulatory permits in place for construction as well as a 25-year energy purchase agreement with BC Hydro, the third-largest electric utility in Canada – factors which made Dokie attractive to GE and Plutonic.

Mark Tonner, managing director of Canada for General Electric Energy Financial Services, said General Electric partnered with Plutonic because the two companies have previously worked together on a hydro investment. They are already jointly developing the 196 megawatt East Toba River and Montrose Creek hydroelectric project and have bid for two other hydroelectric projects in the province: the 166-megawatt Upper Toba Valley and 1,027-megawatt Bute Inlet Project.

Manufacturers Life Insurance Company also participated in the financing of the East Toba River project, Tonner added.

The project is the first wind energy development in British Columbia for General Electric and the first wind development overall for Plutonic, according to Donald McInnes, chief executive officer of Plutonic.

Renewable energy developments are a priority for British Columbia, which has set a goal of becoming self-sufficient in its energy needs by 2016 in part by relying on clean domestic energy sources like hydro and wind power to generate 90 percent of required capacity.

McInnes said he founded Plutonic six years ago with the goal of helping the province meet this goal. The company is listed on the Toronto Stock Exchange and invests in renewable energy power projects across Canada. The East Toba project is its flagship investment. 

Stamford, Connecticut-based General Electric Energy Financial Services is the energy investment arm of US conglomerate General Electric, which also manufactures wind farm equipment such as wind turbines. The Energy Financial Services unit has more than $22 billion in assets and has so far devoted 80 percent of its $4 billion renewable energy portfolio to wind power.

The company plans to expand its renewable energy portfolio to $6 billion by the end of 2010, according to a press release.