GIP-backed Terra-Gen secures $394m debt financing

Global Infrastructure Partners-backed renewable energy developer Terra-Gen Power has closed a $394 million financing for its 150-megawatt Alta Wind I project in Tehachapi, California, according to a statement.

Wind power: attracting debt financing

The financing for the wind farm includes a seven-year construction and term loan, a bridge loan for a cash grant from the US Department of Energy and credit facilities.

Credit Agricole and Natixis acted as co-bookrunners and co-structuring Leads for the financing. The lender group also includes Union Bank, Prudential Investment Management, Cooperatieve Centrale Raiffeisen-Boerenleenbank and Banco Santander, according to the statement.

Overall, Terra-Gen has 831 megawatts of operational generation capacity across wind, solar and geothermal sources of energy. GIP bought a 40 percent preferred equity interest in the company in October 2009.

When the final development milestones are met, and the first phases of Alta are financed and enter construction, GIP’s convertible preferred security will convert into common equity.

The investment structure is aimed at helping GIP avoid assuming near-term development risk and focus on the project’s long-term contracted cash flows, as Terra-Gen has already contracted 1,550 megawatts of wind generation from the Alta project to a local utility.