Duke Energy, Sumitomo secure financing for Kansas wind farms

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Charlotte, N.C., April 26, 2012 – Duke Energy Renewables and Sumitomo Corp. of America finalized their 50-50 ownership arrangement for two Kansas wind farms and secured about $353 million in financing for construction and operating costs.

Previous coverage of this story can be found here.

Duke Energy Renewables, a commercial business unit of Duke Energy, announced plans on March 27 to sell a 50 percent stake in the 131-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 about $330 million and a letter of credit facility totaling roughly $23 million. The lenders involved in the deal were Sumitomo Mitsui Banking Corp., 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 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.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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