GE, UnionBank Complete Lease Transation Supporting 150 MW Calif. Wind Farm

Terra-Gen Power, the New York renewable energy developer, has raised an undisclosed amount of equity financing by entering into a leveraged lease transaction with GE Energy Financial Services, the energy-financing unit of GE and Union Bank subsidiary, Bankers Commercial Corporation.

As part of this transaction GE Energy Financial Services and Bankers Commercial Corporation acquired the 150-megawatt Alta Wind I wind farm in Tehachapi, in Kern County, Calif. and will lease it back to Terra-Gen.

Terra-Gen completed Alta Wind I in the fourth quarter of last year. The facility is backed by a long-term Power Purchase Agreement with Southern California Edison (SCE).

GE and Bankers Commercial will each own a 50 percent stake in Alta Wind I.

“This transaction, our first using a lease for a wind farm, demonstrates our ability to tailor structures to meet our customers’ needs, in this case enabling Terra-Gen to free up cash while enabling it to continue to operate and manage the project,” said GE Energy Financial Services’s Managing Director Kevin Walsh, in a prepared statement.

In March Terra-Gen closed a $394 million financing to complete the construction of Alta Wind I. The financing included a seven-year construction and term loan, a bridge loan to the ITC Department of Energy cash grant. Crédit Agricole CIB and Natixis acted as co-bookrunners and co-structuring leads for the financing. The lender group also included Union Bank, Prudential Investment Management, Rabobank and Banco Santander.

After a long hiatus, this is the second leaseback financing announced over the past month. As we reported, in December San Francisco renewable energy developer Pattern Energy Group entered into a leveraged lease transaction with MetLife, the New York insurance company.

Photo: iStockphoto

Correction: We incorrectly reported that the transaction was a “leveraged lease” transaction when in fact it is a single investor lease .