21 April 2010 -- Algonquin Power & Utilities Corp. began construction of the 26.4 MW Phase I Red Lily Wind Project in southeastern Saskatchewan, Canada. The company executed a turbine supply agreement with Vestas Canadian Wind Technology Inc., received required permits and satisfied conditions for project financing.
The project is owned by Concord Pacific Group who will make an equity investment of approximately C$19 million (US$19 million) in the project. Total capital investment is expected to be C$67.5 million. Project costs will be financed with C$31 million of senior debt provided by Integrated Private Debt Fund II LP and C$17.5 million of senior and subordinated debt provided by Algonquin Power Co. Algonquin will provide services to and will receive fees for the development, construction, operation and supervision of the project. In addition, Algonquin was granted an option to subscribe for a 75 percent equity interest in the project in exchange for its subordinated debt commitment, exercisable five years following project commissioning.
Red Lily I, initially developed by Gaia Power Inc., will consist of 16 Vestas V82 wind turbine generators, which have been procured and are awaiting shipment from a Canadian storage location. Red Lily I enjoys an excellent wind resource with annual gross revenues of C$7.5 million expected in the first year of production and C$8 million expected in the second year. The power purchase agreement with SaskPower is for 25 years and includes a 2 percent annual increase throughout the term of the agreement. Project commissioning is expected to occur in early 2011.
Additional land rights have been secured for a second phase of the project, which would provide an additional 106 MW of generating capacity.
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