Creststreet Power & Income Fund LP has committed to fund up to $31 million in Kettles Hill Wind Energy Inc. via an investment in subordinate notes. Kettles Hill also closed a senior secured credit facility with a Canadian financial institution for up to $42.5 million. As a result, all financing requirements to fund the balance of the 63 megawatt Kettles Hill windpower project to completion have been committed.
Crest Street will invest in Kettles Hill via a subordinated debt facility at the time of the IPO of Creststreet Kettles Hill Windpower LP (“KHLP”) in June 2005.
Eric McFadden, CEO of the General Partner of the Partnership, stated “This investment in Kettles Hill provides Unitholders with an opportunity to participate in a world class windpower project. The Unitholders remain well insulated from any construction risk associated with the Kettles Hill project with over $25 million of common equity sitting below their investment and have a priority claim on the project’s cashflows upon completion. In addition, this solidifies the Partnership’s ability to compete in the expected auction to acquire Creststreet Kettles Hill Windpower LP at completion in the fall of 2006.”
The windpower project at Kettles Hill is situated near Pincher Creek, Alberta. The site is adjacent to a 138kV transmission line. Funding for the CRCE phase of construction and for a portion of the Infill Phase of construction was financed through the $40 million IPO of KHLP.
To date, construction of the foundations for the five CRCE turbines has been completed, in addition to roads, underground and overhead power lines and the substation and other related infrastructure. The delivery of the towers for the five CRCE turbines is now expected in mid December, approximately eight weeks behind schedule, although Kettles Hill is entitled to compensation for the delay. The blades and nacelles, which house the generators, have been delivered to the site. As a result, the General Partner expects the CRCE Phase to be completed six weeks late at the end of January 2006. The interconnection agreement from the project to the transmission grid for Kettles Hill has been executed. The total project remains on budget at an estimated total project cost of $111 million and its contingency remains unused.
Creststreet Power & Income Fund LP, which completed its initial public offering in December 2003, is Canada’s first windpower income fund. The Partnership owns two windpower projects, 54 MW Mount Copper Wind Power Energy Inc. and 30.6 MW Pubnico Point Wind Farm Inc., which generate electricity for sale to provincial electricity utilities pursuant to long-term power purchase agreements.
As additional windpower projects are financed by future Creststreet Capital Corporation flow-through investment vehicles, the Partnership expects that it can provide an attractive liquidity option to those projects while increasing distributions and enhancing diversification for the Partnership. The Partnership will also review additional investments in other renewable energy projects that can provide stable distributions and further diversification.
Creststreet Capital Corporation is an investment management firm specializing in structuring and managing high quality windpower assets and flow-through investment products for Canadian investors. Since being founded in 2000, Creststreet has raised and invested over $525 million for investment in flow-through shares of Canadian resource and renewable energy companies.
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