China Development Bank provides a $150 million USD bilateral loan for the 109.5 MW Shady Oaks Wind Power Project

Project narrative

On June 30, 2011, China Development Bank Corporation (CDB) signed a loan agreement with GSG 6, LLC — a special purpose vehicle (SPV) wholly-owned by Xinjiang Goldwind Science & Technology Co., Ltd. — for the 109.5 MW Shady Oaks Wind Power Project. The loan facility carried a maturity period of 15 years, a 2 year grace period, and an interest rate of LIBOR plus 280 basis points. As a source of collateral, Goldwind pledged its 100% equity stake in GSG 6, LLC to the lender. The 109.5 MW Shady Oaks Wind Facility is a wind energy facility located in Lee County, Illinois, approximately 50 miles (80 km) west of Chicago. The Shady Oaks wind farm consists of 68 1.5 MW permanent-magnet direct-drive (PMDD) turbines, with 82-meter rotors and three 2.5 MW machines with 100-meter rotors. The Shady Oaks Wind Facility is owned by GSG 6, LLC, an entity acquired by Algonquin Power Fund (America) Inc. (APFA) from Goldwind on January 1, 2013 for $148.9 million USD, including the assumption of long-term debt. GSG 6, LLC is party to a fixed price Service and Maintenance Agreement with an affiliate of Goldwind, the original equipment manufacturer, whereby the affiliate provides turbine operation, maintenance and repair services at a contracted rate to the Shady Oaks Wind Facility for the duration of the warranty period under the project turbine supply agreement, which is approximately 20 years. GSG 6, LLC has entered into a 20 year power sales contract with the largest electric utility in the state of Illinois, Commonwealth Edison (ComEd). The power sales contract is structured to hedge the preponderance of the Shady Oaks Wind Facility’s production volume against exposure to PJM ComEd Hub current spot market rates. Annual production is subject to contingent curtailment based on certain regulatory constraints of the electricity purchaser. The remaining generation and associated Renewable Energy Certificates are sold into the market. Under the terms of the power sales contract, GSG 6, LLC is required to provide security in an amount of $4.7 million USD. That obligation is being maintained by Goldwind utilizing an irrevocable letter of credit with an associated fee being assessed to APFA. The U.S. Department of the Treasury issued a $56 million USD to GSG 6 to procure component services from local suppliers. Goldwind USA was the project's turbine supplier. Vensys provided the license for the generator and nacelle technology. Mortenson Construction was the contractor responsible for construction. Sargent & Lundy and Aldridge Electric were involved in construction management. LM Wind Power manufactured the blades and Broadwind Energy produced the towers. Construction on the Shady Oaks Wind Facility began in October 2011. The facility reached commercial operation in June 2012. As of January 1, 2013, the (principal) amount outstanding under the Shady Oaks Project Wind Facility project debt facility with the CDB was $150 million USD. As of December 31, 2014, the (principal) amount outstanding under the Shady Oaks Project Wind Facility project debt facility with CDB was $76.0 million. On APUC’s year-end financial statements for the twelve months ended December 31, 2014, $6 million USD of such facility is classified as current, based on payments of $3 million USD due on each of May 15, 2015, and November 15, 2015. The semi-annual principal repayment schedule under the facility for the following 11.5 years ranges from U.S. $3.0 million to U.S. $6.0 million with a final repayment of $20 million USD in 2026.