Gamesa left holding 80MW US project

UNITED STATES: Canada's Algonquin Power has pulled out of a deal to buy an 80MW project in Iowa from Gamesa, after the manufacturer was unable to secure it a power purchase agreement (PPA).

The project uses Gamesa 2MW turbines

In March, Algonquin agreed to acquire 51% of the Pocahontas Prairie project, along with three others, as part of a 480MW deal. It represented Gamesa's biggest supply contract in the US for 2012.

Last week, Algonquin announced it was proceeding with the acquisition of the now-completed projects Sandy Ridge in Pennsylvania (50MW), Senate in Texas (150MW) and Minonk in Illinois (200MW).

However, Gamesa said it had agreed a deal with Algonquin to increase its investment in the three projects to 60%. The Spanish company confirmed this was because Algonquin had pulled out of the Pocohontas Prairie purchase.

Gamesa said it is in talks with potential buyers of Pocohontas Prairie and for the minority stake in the project's development company.

Back in March, the $888 million Algonquin deal added about $35 million to Gamesa’s EBIT. The company said there was potential for further joint wind energy ventures in North America.

Also involved in the transaction are JP Morgan and Morgan Stanley, which supported the deal by investing tax equity of approximately $360 million.