Polaris Renewable Energy Inc. has announced the closing of the Equity Capital Contribution Agreement (ECCA) and LLC Agreement for Punta Lima Wind Farm LLC, a fully owned subsidiary of Santander Bank N.A. (Santander).
Punta Lima Wind Farm: A Key Asset in Puerto Rico
The Punta Lima Wind Farm (PLWF) is located in the Municipality of Naguabo, Puerto Rico, and has a 26.0 MW capacity as an active onshore wind farm.Santander Bank refurbished and recommissioned the plant, which is currently running under a 20-year power purchase agreement (PPA) with the Puerto Rico Electric Power Authority (PREPA). The PPA up to March 2044 gives the project a stable source of revenue and ensures its long-term sustainability.
Polaris Eyes Long-Term Growth and Grid Stability
Marc Murnaghan, President and CEO of Polaris, stated that the strategic acquisition allows Polaris to invest capital into a new jurisdiction while expanding its wind energy capacity.He also mentioned that the transaction offers attractive near-term returns for shareholders and significantly enhances the company’s growth opportunities.This includes utilizing energy storage for competitively priced energy and grid stabilization services, as well as exploring additional strategic opportunities on the island in light of its future energy needs.
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Polaris Gains Control Through Tax-Equity Deal
The transaction has been completed through a tax-equity structure, allowing Polaris to become the manager and operator of the Punta Lima Wind Farm, while also securing a controlling equity interest. Santander will maintain a taz equity stake in the project. The transaction was contingent on regulatory approvals and standard closing conditions, including the signing of the LLC Agreement. Polaris contributed a total of $20 million in equity, adjusted for typical working capital changes.