Holland & Hart Advises On Project Finance 2004 Americas Renewables Deal Of The Year
Denver, Colorado (April 15, 2005) - Holland & Hart is pleased congratulate its client, Shell WindEnergy, in its award-winning Three Winds project finance deal, which has been named the Renewable Energy Deal of the Year (Americas Region) by Project Finance Magazine. Holland & Hart was legal adviser to Shell WindEnergy on the deal.
Three Winds is the first portfolio of wind farms to raise debt in the US bank market. It is also the first to feature a standby facility that can be sized according to wind resource.
The Three Winds portfolio consists of the Rock River I, Whitewater Hill and Cabazon projects, with a total capacity of 152.5MW. Rock River I, located in Wyoming, was Shell's first commercial scale wind farm and its first project in the US. It is a 50MW farm that sells power to Pacificorp, part of Scottish Power, under a 20-year power purchase agreement. The Whitewater Hill and Cabazon Projects, located in California, sell power under long-term contracts to the California Division of Water Resources.
The $123.5 million total financing included an ability to draw on a $6 million contingent facility that can only be drawn if the sponsor is able to procure an independent engineer's report that justifies a higher debt total, an unusual addendum to this type of agreement.
The structure was built to make the financing as attractive as possible to banks. The three wind farms were also bundled together to generate a sufficient sized portfolio to interest the wider bank market. Virtually every bank invited into the deal participated.
"Wind energy is rapidly growing, particularly in the Western United States. It is becoming one of the most cost effective renewable energy sources and Shell WindEnergy has been on the forefront of this development," states Mark Safty, lead partner advising Shell on the Three Winds Project. "We congratulate Shell on its approach and hope this type of creative financing will open the door to further development."
Three Wind Holdings
Status: Closed September 2004
Size: $ 123 million
Location: Wyoming and California
Description: 152MW portfolio wind farm financing
Sponsors: Goldman Sachs, Shell
Lead arranger: Fortis Capital
Tenor: 15 years
Borrower legal: Holland & Hart
Lender legal: Milbank, Tweed Hadley & McCloy
Independent engineer: Garrad Hassan
Consultant: Global Energy Concepts