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Goldwind project financing 'a significant milestone'

UNITED STATES: Since Goldwind announced in May it had secured $130-140 million in tax equity financing commitments from top-tier American institutions for a 160MW wind project in Texas, the financial floodgates may have opened.

Goldwind turbines being installed at the Shady Oaks project in Illinois
Goldwind turbines being installed at the Shady Oaks project in Illinois

The investment for the Rattlesnake project came from MidAmerican Wind Tax Equity Holdings, a subsidiary of Warren Buffet's Berkshire Hathaway Energy, and US lender Citi.

It is the largest ever financing for Goldwind equipment in the US, and the first time a project with Goldwind turbines has received all-western financing.

The under-construction project will use 64 Goldwind 2.5MW turbines.

"It's the most significant milestone in Goldwind's history in the US," said Goldwind Americas CEO David Halligan. "Our technology is bankable. This kind of makes it official."

Since the investment was announced, Halligan said he has received a "flood" of inquiries from financial institutions.

"It's a pivotal moment in [Goldwind's] ambitions," agreed Make Consulting research manager Luke Lewandowski.

Since Goldwind Americas launched seven years ago, the Chicago-based firm has made moderate inroads in the US.

In 2016, it bought Rattlesnake from RES Americas and announced a conditional agreement for 1.87GW in turbines for early-stage projects in Wyoming by Viridis Eolia, a Venezuelan company, according to the New York Times, with little track record.

Goldwind Americas is also negotiating to buy the second phase, RES Americas' 160MW Rattlesnake 2. The project is likely to use Goldwind technology, and the financing will be watched closely.

Halligan said Goldwind plans to have cumulative orders for 2GW of its turbines in the US, Canada and Mexico by 2020. The firm also has plans for Brazil and Chile.

Halligan said Goldwind "safe-harboured" 1GW of equipment in the US before the end of 2016.

This means the company has firm orders for at least 5% of the 1GW and has contracts for options to buy the remainder. It allows buyers tp qualify for the full Production Tax Credit, which is being phased out over five years.

At AWEA Windpower 2016, Halligan said Goldwind hoped to enter the top tier of turbine makers in the US, currently GE, Vestas and Siemens.

"I think the time is now. We have the technology and the momentum," he said at the time.

However, he now concedes that that kind of a breakthrough is "a tall order."

During last year's presidential election campaign, Donald Trump threatened a large tariff on Chinese imports.

Analysts say that a border adjustment is more likely, whereby imports cannot be tax-deducted, but any such barrier would disadvantage Goldwind.

"Whatever the situation is, we'd have to evaluate it... and figure out a strategy at that point," Halligan said.

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