Algonquin buys remaining stake in Gamesa US projects

UNITED STATES: Algonquin Power has agreed to buy the remaining 40% of a 400MW US wind power portfolio from Gamesa.

The projects all feature Gamesa's 2MW machines

However, the Spanish manufacturer and developer has still been left holding the 80MW Pocahontas Prairie project, which Algonquin pulled out of buying last year.

The Canadian utility had bought a 60% controlling stake in three wind farms with a total capacity of 400MW in a deal finalised in December last year, but has now acquired the remaining holding.

Significantly, the Pocahontas Prarie project was not included in the sale. The ill-fated project is still to secure a power purchase agreement, even though construction was fully completed last year.

Algonquin sought to compensate Gamesa for pulling out of the purchase and leaving the Spanish firm to find a new buyer by increasing the original stake it bought from 51% to 60%.

When contacted, Gamesa said that it is still seeking a buyer for the project and is "looking to secure the best price".

Gamesa would not be drawn on whether this latest acquisition is further compensation for the fact that it is still struggling to find a buyer for the development.

Algonquin CEO Ian Robertson explained the thinking behind the purchase, commenting: "We have been pleased with the performance of these assets over the past year and the acquisition of the balance of these three wind generating facilities adds additional accretive, low risk earnings and cash flow."

The three projects in which Algonquin is to buy the remaining stakes are the 200MW Minonk wind farm in Illinois, the 150MW Senate development in Texas and the 50MW Sandy Ridge project in Pennsylvania.

All three projects feature turbines from Gamesa's 2MW range. The manufacturer will continue to provide operations and maintenance services for the wind turbines under a 20-year contract.

The deal is expected to be closed in early 2014.