Clearway Energy, Inc. (NYSE: CWEN, CWEN.A) ("Company"), today (6/17) announced that, through an indirect subsidiary of the Company, it has entered into binding equity commitment agreements in the previously announced partnership with Clearway Group to enable the repowering of two of its existing wind assets, Wildorado and Elbow Creek. These agreements commit the Company to invest an estimated $111 million in net corporate capital1, subject to closing adjustments. The transaction is expected to contribute incremental asset CAFD on an average annual basis of approximately $12 million beginning in 20202, which reflects the improved operational profile of the projects and the impact from the new non-recourse capital structure employed at the partnership.
"Our commitment to invest in the repowering of these two important wind assets highlights a new area of organic growth for the Company," said Christopher Sotos, Clearway Energy, Inc.'s President and Chief Executive Officer. "We are pleased to achieve this important milestone in collaboration with our partner Clearway Group and look forward to working together in the future to prudently and accretively repower other projects in the Company's portfolio."
"Repowering our wind energy assets will extend the life of these projects with modern technology that is more efficient and cost-effective than ever," said Craig Cornelius, Chief Executive Officer at Clearway Group, "We're proud to collaborate on this important investment and continue to play a leading role in our nation's growing clean energy economy."
Highlights of the transaction include:
- 283 MW of Repowered Wind Projects: The 161 MW Wildorado Wind Project, located in Vega, TX, and the 122 MW Elbow Creek Wind Project, located in Howard County, TX
- Improved Operational Profile: Benefits of the repowering include the extension of design life, the reduction in operational and maintenance expenditures, and new warranty coverage
- Enhanced Contract Duration: Elbow Creek has entered into a new hedging arrangement with an investment-grade bank counterparty via which a majority of Elbow Creek's output will now be contracted through 2029 rather than through 2022; the existing Wildorado PPA with a subsidiary of Xcel Energy (A-/A3) continues to run through 2027
- Non-Recourse Partnership Financing Summary: The partnership entered into a tax equity arrangement which, in combination with the Company's equity investment, will be used to repay construction financing and costs related to the Repowering and to reduce outstanding principal at the existing Viento project financing through the removal of Wildorado from the Viento collateral package
- Corporate Funding Approach: The corporate capital commitment will be funded at Repowering COD of each project, will utilize existing corporate liquidity, and will have a limited impact on the Company's corporate leverage ratio
- Construction Management: As part of the partnership, Clearway Group will manage all aspects of the construction process
- Technology: Siemens Gamesa Renewable Energy turbines
The Company expects to fully close the transaction by the end of 2019. Completion of the investment is subject to customary closing conditions, including approval by the Public Utility Commission of Texas.
About Clearway Energy, Inc.
Clearway Energy, Inc. is a leading publicly-traded energy infrastructure investor focused on modern, sustainable and long-term contracted assets across North America. Clearway Energy's environmentally-sound asset portfolio includes over 7,000 megawatts of wind, solar and natural gas-fired power generation facilities, as well as district energy systems. Through this diversified and contracted portfolio, Clearway Energy endeavors to provide its investors with stable and growing dividend income. Clearway Energy's Class C and Class A common stock are traded on the New York Stock Exchange under the symbols CWEN and CWEN.A, respectively. Clearway Energy, Inc. is sponsored by its controlling investor Global Infrastructure Partners (GIP), an independent infrastructure fund manager that invests in infrastructure and businesses in both OECD and select emerging market countries, through GIP's portfolio company, Clearway Energy Group.
About Clearway Energy Group
Clearway Energy Group is accelerating the world's transformation to a clean energy future. With more than 4.1 gigawatts of solar and wind energy assets in 25 states and a development pipeline across the country, we are offsetting the equivalent of nearly 9 million tons of carbon emissions for our customers. The company is headquartered in San Francisco, CA with offices in Carlsbad, CA; Scottsdale, AZ; Houston, TX; and New York, NY. For more information, visit www.clearwayenergygroup.com.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, and typically can be identified by the use of words such as "expect," "estimate," "anticipate," "forecast," "plan," "outlook," "believe" and similar terms. Such forward-looking statements include, but are not limited to, statements regarding the potential operational and economic benefits of the Repowering transaction. These forward-looking statements are subject to a variety of risks and uncertainties. Such risks and uncertainties include, but are not limited to, the possibility that the operational and financial benefits of the Repowering transaction will not be realized, as well as factors described from time to time in Clearway Energy, Inc.'s filings with the Securities and Exchange Commission at www.sec.gov. In addition, Clearway Energy, Inc. makes available free of charge at www.clearwayenergy.com copies of materials it files with, or furnishes to, the SEC.
Although Clearway Energy, Inc. believes that the expectations are reasonable, it can give no assurance that these expectations will prove to be correct, and actual results may vary materially. Clearway Energy, Inc. undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The Adjusted EBITDA and Cash Available for Distribution are estimates as of today's date, June 17, 2019, and are based on assumptions believed to be reasonable as of this date. Clearway Energy, Inc. expressly disclaims any current intention to update such guidance.
