Atlantic Power Corporation Announces Closing of Construction Financing for First Biomass Project
October 21 2010 - 4:30PM
Marketwired
Atlantic Power Corporation (TSX: ATP)(NYSE: AT) (the "Company")
today announced the closing of non-recourse, project-level bank
financing for Piedmont Green Power (the "Project"), the Company's
first biomass power project. The terms of the financing include an
$82 million construction and term loan and a $51 million bridge
loan for approximately 95% of the stimulus grant to be received
from the U.S. Treasury 60 days after the start of commercial
operations. MUFG Power and Utilities and Investec are the lead
arrangers and joint bookrunners for the financing. In addition, the
Company will make an equity contribution of approximately $75
million for substantially all of the equity interest in the
Project.
Piedmont Green Power is a 53.5 MW biomass plant located in
Barnesville, Georgia, approximately 70 miles south of Atlanta. The
Project was developed and will be managed by Rollcast Energy, Inc.,
a biomass developer in which the Company owns a 60% interest.
Construction of the Project is expected to generate more than 300
jobs and, once completed, will provide 27 full-time jobs during
operation. The Project will utilize approximately 500,000 tons of
woody biomass annually, including logging residue, mill residue and
urban wood waste.
Construction under the terms of a fixed-price, turnkey contract
will begin immediately and the Company expects the Project to be
fully operational by the fourth quarter of 2012. Following
construction, the term loan matures in five years but amortizes on
an 18-year schedule. The Project has executed a swap that results
in an average fixed interest rate of approximately 5.2% during the
construction period and the first three years of the term loan.
Cash distributions to the Company from the Project are expected to
average $8 million to $10 million for each full year of project
operation. The Project has a 20-year power purchase agreement under
which capacity payments represent the majority of the revenues. In
addition, the revenue and fuel supply contracts contain adjustment
mechanisms that will mitigate potential biomass fuel price
volatility.
"Completion of financing and the start of construction of the
Piedmont Project is another example of our growth strategy in
action," commented Barry Welch, President and CEO of Atlantic
Power. "This Project will further diversify our asset base and
increase the long-term stability of our dividends to
shareholders."
This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities and shall not constitute
an offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful.
Certain statements in this news release may constitute
"forward-looking statements", which reflect the expectations of the
Company regarding the Company's expectations about its investment
in Piedmont Green Power. Such forward-looking statements reflect
current expectations regarding future events and operating
performance and speak only as of the date of this news release.
Such forward-looking statements are based on a number of
assumptions which may prove to be incorrect, including, but not
limited to the assumptions that the Piedmont Green Power's
construction will be complete in 2012 and that cash distributions
from the project in the range of $8 million to $10 million for each
fall year of operation are expected. Forward-looking statements
involve significant risks and uncertainties, should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether or not, or the times
at or by which, events will occur. In addition to the assumptions
described above, reference should also be made to the factors
discussed under "Risk Factors" in the Company's Annual Information
Form dated March 29, 2010. Although the forward-looking statements
contained in this news release are based upon what are believed to
be reasonable assumptions, investors cannot be assured that actual
results will be consistent with these forward-looking statements,
and the differences may be material. These forward-looking
statements are made as of the date of this news release and, except
as expressly required by applicable law, the Company assumes no
obligation to update or revise them to reflect new events or
circumstances.
About Atlantic Power
Atlantic Power Corporation is an independent power producer with
power projects located in major markets in the United States. The
Company's assets consist of interests in 12 operational power
generation projects across eight states, a 500 kilovolt 84-mile
electric transmission line located in California, one wind project
under construction in Idaho, one biomass project under construction
in Georgia and five development projects in five states. The
Company's power generation projects in operation have an aggregate
gross electric generation capacity of approximately 1,823 megawatts
(or "MW"), in which the Company's ownership interest is
approximately 808 MW. For more information, please visit the
Company's website at www.atlanticpower.com.
Contacts: Atlantic Power Corporation Patrick Welch (617)
977-2700 info@atlanticpower.com www.atlanticpower.com
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