ARKANSAS, Dec 28 (Future Headlines)- Pattern Energy Group, a prominent player in the renewable energy and transmission infrastructure sector, has marked a historic milestone by closing an $11 billion non-recourse financing deal for the SunZia Wind and Transmission project. This endeavor is deemed the largest clean energy infrastructure project in U.S. history, ushering in an era of substantial clean power generation and economic impact.
The SunZia Transmission component entails the construction of a 550-mile, ±525 kV high-voltage direct current (HVDC) transmission line. Stretching between central New Mexico and south-central Arizona, this transmission line is designed to have the capacity to transport 3,000 MW of clean, reliable, and affordable electricity across Western states.
SunZia Transmission is integrally linked to the SunZia Wind facility, a colossal wind energy project with an impressive capacity of 3,515 MW. This wind project is touted as the largest in the Western Hemisphere, encompassing Torrance, Lincoln, and San Miguel Counties in New Mexico. The SunZia Wind and Transmission project is not merely an energy initiative; it is a significant driver of economic growth. The anticipated economic impact is substantial, with expectations exceeding $20 billion. This transformative venture is set to bring clean power to approximately 3 million Americans, making it a vital contributor to the clean energy transition.
The financing structure for this monumental project is comprehensive, encompassing an integrated construction loan, a letter of credit facility, term facilities, an operating phase letter of credit facility, a tax equity term loan facility, and a holding company loan facility. This diverse financial arrangement underscores the complexity and scale of the SunZia Wind and Transmission project.
The success of the financing is attributed to the collaboration of major financial institutions. BNP Paribas, Crédit Agricole Corporate and Investment Bank, CoBank, ACB; Desjardins Group, Export Development Canada, ING Capital LLC, Intesa Sanpaolo S.p.A., New York Branch, KFW IPEX-Bank, MUFG Bank, Ltd., National Bank of Canada, Natixis Corporate & Investment Banking, Societe Generale, Sumitomo Mitsui Banking Corporation, and Wells Fargo Securities, LLC played pivotal roles as Initial Coordinating Lead Arrangers and Joint Bookrunners.
The financing arrangements are structured as green loan facilities, aligning with the Green Loan Principles. This strategic alignment reflects a commitment to sustainable financing practices, emphasizing the importance of environmentally responsible investments in the renewable energy sector.
A significant component of the financing is the $2.25 billion tax equity term loan facility. Banco Santander, S.A, New York Branch, and Santander Bank N.A. acted as Joint Coordinating Lead Arrangers, with participation from Bank of America, GE Vernova’s Financial Services business, Natixis Corporate & Investment Banking, and Royal Bank of Canada. The final piece of the financing puzzle is the holding company facility, where Nomura Securities International, Inc., and CPPIB Credit Investments III Inc. (a subsidiary of Canada Pension Plan Investment Board) have played a role. This facility supports the initial equity capital for the project.
Canada Pension Plan Investment Board (CPP Investments), a key participant in the financing, expressed its support for Pattern Energy and the SunZia project. CPP Investments views SunZia as an essential step in the global transition to renewable energy, expecting attractive, risk-adjusted returns over the long term. Hunter Armistead, CEO of Pattern Energy, expressed gratitude to the financial partners and emphasized the project’s potential to set an example for other ambitious renewable infrastructure initiatives. The successful financing is a testament to the commitment of all stakeholders involved.
Riverstone Holdings, a significant player in the energy industry, acknowledged the importance of the SunZia project in unlocking significant value. The collaboration with financing partners is seen as instrumental in positioning Pattern Energy for its next stage of growth. The SunZia Wind and Transmission project is expected to employ more than 2,000 workers during the construction phase. These include a diverse range of roles such as heavy equipment operators, electricians, laborers, and more. Additionally, the project engages industry-leading suppliers and contractors to ensure the highest standards of expertise.
Key players in the execution of the project include Quanta Infrastructure Services Group (EPC Contractor for the transmission line), Hitachi Energy (HVDC supplier), and Blattner Energy (EPC contractor for the wind project). Noteworthy contributions also come from GE Vernova and Vestas, supplying wind turbines. Pattern Energy and SunZia Transmission have collaborated with the New Mexico Renewable Energy Transmission Authority (RETA) on the development of the transmission project in New Mexico. This collaborative approach fosters synergies between public and private entities for the successful realization of the project.
Legal representation for the project involves prominent law firms, with Skadden, Arps, Slate, Meagher & Flom LLP serving as borrower counsel, Norton Rose Fulbright US LLP representing senior lenders, and Milbank LLP representing tax equity term loan lenders. Local counsel is provided by Holland & Hart LLP, Rodey, Dickason, Sloan, Akin, & Robb, P.A., and Snell & Wilmer L.L.P. MUFG Bank, Ltd. plays a crucial role as the Administrative Agent, with Deutsche Bank Trust and Agency Services acting as the collateral and deposit agent. BNP Paribas, Crédit Agricole Corporate and Investment Bank, MUFG Bank, Ltd., Societe Generale, and Sumitomo Mitsui Banking Corporation serve as co-syndication agents, showcasing the collaborative nature of the financing arrangement.
- Conclusion: A Transformative Chapter in Clean Energy Infrastructure
The SunZia Wind and Transmission project spearheaded by Pattern Energy is undoubtedly a transformative chapter in the landscape of clean energy infrastructure. Its record-breaking financing, extensive collaboration with major financial institutions, commitment to green financing principles, and anticipated economic impact underscore its significance. As the project progresses, it is poised not only to deliver clean power to millions but also to leave a lasting imprint on the renewable energy sector, setting benchmarks for future initiatives. The SunZia project is not just about energy; it symbolizes the convergence of sustainable practices, economic development, and the collective pursuit of a cleaner, greener future for generations to come.
Reporting by Kevin Wood; Editing by Sarah White