San Francisco-based Pattern Energy has announced more than a US$1billion in key strategic initiatives including with US private-equity firm Riverstone and with PSP Investments, a major Canadian pension fund.
Pattern a wind, solar and infrastructure developer, has secured up to US$1 billion in new capital commitments for an affiliate, Pattern Development 2.0 – including a US$60 million minority investment by Pattern Energy for a 20% interest – and more than US$700 million from largely institutional investors through a Riverstone-managed entity.
Pattern also divulged a strategic co-investment relationship with PSP Investments, which is acquiring 8.7 million shares of Pattern Energy stock from development affiliate Pattern Development. PSP thus becomes the largest shareholder in Pattern Energy.
Under the agreement, PSP Investments will co-invest US$500 million in projects purchased by Pattern Energy under the company’s ‘right of first offer’ (ROFO) with Pattern Development, including investments in the Meikle, Mont Sainte-Marguerite and Panhandle 2 wind projects in Canada and Texas.
Meikle, in British Columbia, is a 179-MW project operating under a 25-year power purchase agreement (PPA) with BC Hydro. It will now be jointly owned by Pattern Energy and PSP Investments. The same goes for the 143-MW Mont Sainte-Marguerite project in Quebec, which has a 25-year PPA with Hydro-Québec.
Overall, the move expands the company’s development pipeline to 10 GW, with an additional 275 MW on its ROFO list. ROFO projects include a number of wind, solar and hydro projects in Japan, Chile, Ontario and the US.
“With these exciting initiatives, we have created an extraordinary opportunity to continue our growth,” said Pattern Energy CEO Mike Garland. “Pattern Development has secured major long-term commitments, increased the size of its pipeline by 70% and increased the identified ROFO list by 43%.”
He also said: “The strategic relationship with PSP Investments provides us with increased capital flexibility for new opportunities while allowing us to meet our growth targets. PSP Investments’ participation demonstrates confidence in our business model, and in the renewables sector. We believe these major initiatives support our commitment to increase value for our shareholders, and we can make all of these initial investments without an equity raise.”
Patrick Samson, Managing Director, Infrastructure Investments at Ottawa-based PSP Investments, added: “This relationship grants us access to a portfolio of projects and a source of new assets in renewables, and we believe it will provide good and stable returns for our contributors and beneficiaries.”
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