The closing of the sale is subject to certain conditions, including the approval of the Ontario Power Authority.
The five projects, each totaling 10Mw, are Clean Breeze, Cloudy Ridge, Settlers Landing, Snowy Ridge, and Grey Highlands. All five projects were awarded power contracts under the OPA Feed-in Tariff program in April 2010 where Wind Works was awarded power contracts totaling 80Mw.
Terms of the agreement provide for PRE assuming all costs to develop, construct, and operate the projects. Total investment is approximately $150m, and once built the projects will provide enough clean energy to power the equivalent of approximately 12,500 homes every year.
Transaction highlights include a payment equal to $105,000 per Mw of the project's final constructed nameplate capacity; payable as $1m deposit (received February 28, 2011); 50 percent (including the deposit) at closing; and 50 percent once government permits for construction are obtained, a royalty equal to 2.5 percent of the projects gross annual revenue
The transaction highlights also include a success fee equal to $30,000 per Mw of the project's final constructed nameplate capacity if the net capacity factor (NCF) is higher than 30 percent; a performance royalty, payable if the Projects cumulative NCF exceeds 30 percent, equal to 50 percent of the annual revenue directly attributable to the NCF exceeding 30 percent; and payment of development expenses of approximately $1m.
Ingo Stuckmann, CEO and director of Wind Works, said: â€œWe are very excited to be working with Premier Renewable given their expertise, and strong track record of success in the wind industry. We will use the funds from this sale to continue development of our pipeline of projects in Ontario, Germany, and the US.
â€œIt is our objective to sell projects at their maximum point of leverage for a gain, while retaining a royalty interest in these projects in order to provide a steady revenue flow over time.â€
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