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NRG Yield buys world's biggest wind farm cluster

UNITED STATES: NRG Yield has agreed to buy the world's largest cluster of wind farms, the 947MW Alta Wind project in California, from Terra-Gen Power.

The project features GE and Vestas turbines
The project features GE and Vestas turbines

The renewable energy investor is set to pay $870 million for the project, plus the assumption of $1.6 billion of non-recourse financings. The deal is expected to be closed in the third quarter.

NRG said that it intends to fund the purchase through a combination of new debt, equity and cash.

The company expects that the project will add to its earnings before interest, taxes, depreciation, and amortisation to the sum of around $220 million a year by 2016.

Alta Wind was constructed near Los Angeles on the site of some of the world's first large-scale wind farms. It is made up of GE and Vestas turbines across a number of different phases brought online over the last four years.

The project has long-term power purchase agreements with Southern California Edison, with 21 years of remaining contract life for phases I-V and 22 years, beginning in 2016, for phases X and XI.

Included in the purchase is the portfolio of land leases that are associated with the project. NRG did not make clear whether it intends to go ahead with further development of the project, for which construction consent has been granted.

NRG Yield is a subsidiary of NRG Energy, formed in 2012 to aid the company's move away from fossil fuels. NRG Energy said last December that it would close two coal-fired power plants in Maryland.

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