Pattern Energy, headquartered in California, has agreed to a series of transactions highlighted by: agreements to acquire 206 MW of owned capacity in projects from Pattern Development 1.0 and Green Power Investments and an additional investment in Pattern Energy Group 2 to fund the acquisition of a controlling interest in GPI, a Japanese renewable developer, from Pattern Development 1.0.
Mike Garland, CEO of Pattern Energy, said, "Japan is one of the largest electrical grids in the world and has one of the most robust renewable energy markets. GPI's development pipeline consists of 2.4 GW of projects, including 600 MW of wind capacity which have qualified for FiT contracts. Additionally, we believe that as we grow our portfolio, we will be able to enhance our economics over time with the use of local, low cost capital."
The 206 MW portfolio consists of two operating solar projects (Futtsu and Kanagi), one operating wind project (Otsuki) and two in-construction wind projects (Ohorayama and Tsugaru)
The $131.5 million acquisition price for the 84 MW project portfolio (Futtsu, Kanagi, Otsuki and Ohorayama) and the $27 million investment in Pattern Development 2.0 will be funded from existing corporate liquidity sources.
Pattern Energy will also enter into a 12-year hedge agreement for the four projects to manage the foreign exchange movements of the cash flows from the Japanese assets. The acquisition and funding of these projects is expected to close in March 2018.
The $194 million total consideration for the acquisition of the Tsugaru project is split into two payments with no Pattern Energy corporate capital required until commercial operations begin.
The Conflicts Committee of the Board of Directors of Pattern Energy, which is comprised entirely of independent directors, reviewed and recommended the terms of the acquisitions for approval by the Board of Directors, and it was approved by the Board. The Conflicts Committee was advised on financial matters by Evercore Group L.L.C., which also provided a fairness opinion.