Seeking bids for project finance

Spurred by the growing global interest among financiers looking to invest in wind, a Canadian provincial utility is issuing a request for proposals (RFP) for the financing of the capital costs of a planned 30 MW wind farm at the eastern end of Prince Edward Island (PEI). It is the second wind project embarked upon by the PEI Energy Corporation, which is owned by the provincial government.

"The request for proposals will allow us to select the most favourable financing package for islanders," says PEI energy minister Jamie Ballem. The Energy Corporation's first wind project was financed "in house" by the provincial treasury, an alternative the government will consider this time around, Ballem says. but one it is not prepared to settle on just yet. "There are so many options out there that we don't want to sit back and say this is what we would like. I'd rather say: tell me what you can offer me."

Interest in financing the C$55 million project, says Ballem, is strong. The province issued a request for information from potential lenders this spring and received ten responses. It has received numerous inquiries since then. "By going out with an RFP, what we are looking at is two things. Obviously one is interest rate. But the second is flexibility in repayment," he says. The government wants to give islanders a chance to invest in the project.

"If we get good success, for example if islanders put $20 million into it, we want to be able to make the decision: do we pay down some of the debt, or do we invest that money into further projects. So we want to see what the market has to offer."

Construction of the project is tentatively scheduled to start in the spring, with the plant coming online the following autumn.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in