Algonquin buys 200MW Odell project

Canada’s Algonquin Power has acquired the 200MW Odell wind project, currently under construction in the US state of Minnesota, from the developer Geronimo Energy.

In order to pay for its share of the anticipated $313.5m construction bill, Toronto-listed Algonquin separately announced that Emera, its largest shareholder, has agreed to buy C$70m ($64.3m) worth of “subscription receipts”, which are convertible into Algonquin shares.

Tax equity investors will provide $190.8m of equity financing towards Odell, according to Algonquin.

The Odell wind farm is slated for commissioning in late 2015, and will use 100 Vestas V110-2.0 turbines. The project has a 20-year power purchase agreement with Xcel Energy.

The deal follows a spate of US wind acquisitions from Algonquin in recent years, including its buy out earlier this year in the remaining stake of a 400MW portfolio from Gamesa, and last year’s acquisition of Goldwind’s 109MW Shady Oaks project in Illinois.

“There is significant demand for renewable energy in the US and the investment in Odell is one of several near-term opportunities that we see for accretive growth,” says Algonquin chief executive Ian Robertson.

Emera, an energy and services company based in the Canadian province of Nova Scotia, already owns a 24% stake in Algonquin.

Emera says that is decision to buy nearly 7.9 million subscription receipts in Algonquin for C$8.90 apiece – each convertible into a normal share – is purely in support of Algonquin’s acquisition of the Odell project. Emera says it has no intention of gaining control of Algonquin.

Algonquin shares currently trade at C$8.86.