Duke Energy Renewables and Sumitomo Corp. of America (the U.S. subsidiary of Sumitomo Corp.) announced the companies have finalized their 50-50 ownership arrangement for two Kansas wind farms and secured approximately $353 million in financing for construction and operating costs. Duke Energy Renewables, a commercial business unit of Duke Energy, announced plans on March 27 to sell a 50 percent stake in the 131-megawatt (MW) Cimarron II Windpower Project in Gray County and the 168-MW Ironwood Windpower Project in Ford County to Sumitomo. The companies will complete construction of both wind farms later this year.
The financing, which closed April 18, consists of a construction and term loan facility of approximately $330 million and a letter of credit facility totaling roughly $23 million. The lenders involved in the deal were Sumitomo Mitsui Banking Corporation, Mizuho Corporate Bank, Ltd., and Bank of Tokyo-Mitsubishi UFJ, Ltd. Vinson & Elkins and Kirkland & Ellis provided legal counsel to Duke Energy Renewables and Sumitomo, respectively, during the formation of the joint venture. Chadbourne & Parke represented the joint venture partners in the financing effort. Milbank, Tweed acted as legal counsel to the lenders.
Both the Cimarron II and Ironwood projects have long-term contracts in place to sell the electricity they generate. Kansas City Power & Light will purchase all of the electricity and associated renewable energy credits (RECs) produced by Cimarron II under the terms of a 20-year agreement. Westar Energy will buy all the power and RECs produced by the Ironwood wind farm through a 20-year agreement.