LONDON, UK: The Board of Ecofin U.S. Renewables Infrastructure Trust announced the closing of the following acquisition, which will further deploy the Company’s IPO proceeds.
Closing the acquisition of Echo Solar Portfolio’s largest asset
In July, the Company signed an agreement to acquire twelve solar photovoltaic projects, which are at construction stage and are expected to be completed and to commence operations in phases beginning in the first quarter of 2022.
The combined capacity of the projects is estimated at 69 megawatts (MW) and the aggregate asset value is approximately $95 million. On 17 September, the Company closed the acquisition of the 13.7 MW solar project in Minnesota representing approximately 25% of Echo Solar Portfolio’s asset value.
This high quality solar project reinforces the differentiated nature of RNEW through its 25 year fixed-price power purchase agreement with an investment grade rated utility to insulate cash flows from volatile wholesale power prices. The remaining eleven assets comprising the Echo Solar Portfolio are progressing their project milestones which will enable more project closings in the near term consistent with the plans announced in July.
Near Term Pipeline Update
The Company’s Investment Manager reports that its advanced near term pipeline of contracted solar and wind deals committed or under exclusivity totals approximately $100 million. This amount comprises a $38 million incremental investment in the Echo Solar Portfolio through a reduction in project level gearing, $50 million for an operating wind asset and $12 million for a construction stage commercial solar asset, both under exclusivity. The broader near term pipeline continues to be in excess of $3.0 billion including two wind assets totalling $62 million and two solar assets totalling $50 million, each with bids submitted.
Since the Company has approximately $30 million remaining of uncommitted IPO funds to be fully deployed it is pursuing both a non-recourse construction loan facility related to the Echo Solar Portfolio and a Company subsidiary senior secured revolving credit facility in parallel with its existing equity placing programme to ensure sufficient funds are available to absorb this expected investment growth in 2021. Given the quantum of the advanced near-term pipeline, the Company maintains its expectation of fully deploying its IPO proceeds into solar and wind investments in 2021 consistent with its target at the time of IPO issuance.