Deal details: Innergex has secured a comprehensive financing package of $534mn, comprising construction and term financing, along with a $49mn letter of credit. The financing includes a significant $203mn 10-year non-recourse term loan. Joint lead arrangers such as BNP Paribas, Credit-Agricole CIB, Export Development Canada, and MUFG Bank actively participated in the financing. With this successful funding, Innergex has reached the final investment decision (FID) for the project, and construction activities are set to commence immediately. The project already holds a 30-year power purchase agreement with PacifiCorp, signed earlier this year, further solidifying its economic viability. Additionally, the project qualifies for the Energy Community Production Tax Credit (PTC) Bonus, potentially benefiting from 110% of the PTCs, while the eligibility for the 10% Domestic Content PTC Bonus is currently being assessed. Additionally, the process of securing a tax equity commitment is well advanced and expected to close during Q3 2023. Remarkably, this agreement marks the largest project financing secured for a wind farm in the US this year.
Deal rationale: Secured financing will support Innergex in completing the Boswell wind farm on schedule and also allows the company to repay its revolving credit facilities. The company has previously funded a $103mn part of the project capital expenditure to start with the pre-construction activities. The project, like several others in the US, experienced delays in 2022 due to the challenges brought about by the Russia-Ukraine war. However, the enactment of the Inflation Reduction Act (IRA) in August 2022 has created a more favorable business environment, enabling developers like Innergex to expedite the development of these previously delayed projects even with their current liquidity in hand. The extension of investment and production tax credits (ITCs and PTCs) under the IRA has substantially enhanced the economic feasibility of these projects, bolstering developers' confidence to secure project financing and move forward with their endeavors.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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