Pattern Energy Group LP (Pattern Energy), a leader in renewable energy and transmission infrastructure, has closed an $11 billion non-recourse financing and begun full construction of SunZia Transmission and SunZia Wind, which together is the largest clean energy infrastructure project in U.S. history.
SunZia Transmission is a 550-mile ±525 kV high-voltage direct current (HVDC) transmission line between central New Mexico and south-central Arizona with the capacity to transport 3,000 MW of clean, reliable, and affordable electricity across Western states. SunZia Transmission will deliver clean power generated by Pattern Energy’s 3,515 MW SunZia Wind facility, the largest wind project in the Western Hemisphere, which is being constructed across Torrance, Lincoln, and San Miguel Counties in New Mexico.
This groundbreaking financing includes an integrated construction loan and letter of credit facility, two separate term facilities, an operating phase letter of credit facility, an innovative tax equity term loan facility and a holding company loan facility.
“Our hope is this successful financing of the largest clean energy infrastructure project in American history serves as an example for other ambitious renewable infrastructure initiatives that are needed to accelerate our transition to a carbon free future,” said Hunter Armistead, CEO of Pattern Energy. “We are very grateful to all of our financial partners who are backing SunZia as part of this record-setting project financing. Construction is well underway on this historic project that will deliver clean power.
For the approximately $8.8 billion construction and term facilities, BNP Paribas, Crédit Agricole Corporate and Investment Bank, CoBank, ACB; Desjardins Group, Export Development Canada, ING Capital LLC, Intesa Sanpaolo S.p.A., New York Branch, KFW IPEX-Bank, MUFG Bank, Ltd., National Bank of Canada, Natixis Corporate & Investment Banking, Societe Generale, Sumitomo Mitsui Banking Corporation and Wells Fargo Securities, LLC acted as Initial Coordinating Lead Arrangers and Joint Bookrunners. Banco Bilbao Vizcaya Argentaria, The Bank of Nova Scotia and Sumitomo Mitsui Trust Bank, Limited, New York Branch acted as Coordinating Lead Arrangers.
BNP Paribas, Crédit Agricole Corporate and Investment Bank, MUFG Bank, Ltd., Societe Generale, and Sumitomo Mitsui Banking Corporation are acting as co-syndication agents. MUFG Bank, Ltd. is acting as Administrative Agent and Deutsche Bank Trust and Agency Services is acting as collateral and deposit agent for the transaction.
The financings are structured as green loan facilities in alignment with the Green Loan Principles and BNP Paribas, Crédit Agricole Corporate and Investment Bank, Desjardins Group, ING Capital LLC, Intesa Sanpaolo S.p.A, New York Branch, National Bank of Canada, Natixis Corporate & Investment Banking, Societe Generale, and Sumitomo Mitsui Banking Corporation, and Wells Fargo Securities, LLC acted as Co-Green Loan Structuring Agents.
A $2.25 billion tax equity term loan facility was provided by Banco Santander, S.A, New York Branch and Santander Bank N.A. (SBNA) as Joint Coordinating Lead Arrangers. Bank of America, GE Vernova’s Financial Services business, Natixis Corporate & Investment Banking and Royal Bank of Canada acted as Joint Lead Arrangers. SBNA acted as administrative agent. The facility monetizes project tax credit attributes.
Nomura Securities International, Inc., and CPPIB Credit Investments III Inc., a subsidiary of Canada Pension Plan Investment Board (CPP Investments) has participated in the final piece of the financing, a holding company facility to support initial equity capital for the project.
Skadden, Arps, Slate, Meagher & Flom LLP served as borrower counsel for the Borrower while Norton Rose Fulbright US LLP served as senior lenders counsel to the senior facilities lenders and the holding company facility lenders and Milbank LLP represented the tax equity term loan lenders. Holland & Hart LLP and Rodey, Dickason, Sloan, Akin, & Robb, P.A. served as local counsel for the Borrower, and Snell & Wilmer L.L.P. served as local counsel for the lenders.
“SunZia represents an important step forward in the global transition to renewable energy and we are pleased to support Pattern as it works to bring this project toward completion,” said Bill Rogers, Managing Director, Global Head of Sustainable Energies, CPP Investments. “CPP Investments’ ability to provide a unique combination of flexible capital and deep expertise places us well to support projects like SunZia, which we expect will provide attractive, risk-adjusted returns to the CPP Fund over the long term.”
“We congratulate Hunter and the entire Pattern team on today’s milestone,” said Yakov Tsveig, Principal of Riverstone Holdings LLC. “The SunZia project represents the latest, largest, and most exciting part of the journey we started with management in the formation of Pattern in 2009 and when we made our first joint investment into New Mexico in 2017. We are grateful for the conviction shown by our numerous financing partners, helping unlock significant value and positioning Pattern for its next stage of growth.
“This financing is a testament to the commitment of our financing partners to the renewable energy space and to Pattern,” said Daniel Elkort, Executive Vice President at Pattern Energy. “The size and scale of both the SunZia project and this multifaceted financing show that the renewable energy space can secure attractive capital at levels previously only seen in traditional generation.”
SunZia Wind and Transmission will employ more than 2,000 workers on-site during construction, including heavy equipment operators, electricians, laborers, and others. The project will also utilize the expertise of several industry-leading suppliers and contractors. The EPC Contractor of the transmission line is Quanta Infrastructure Services Group and the HVDC supplier is Hitachi Energy. The EPC contractor for the wind project is Blattner Energy, a Quanta affiliated company. The wind turbines are being supplied by GE Vernova and Vestas.
SunZia Transmission and Pattern Energy have partnered with the New Mexico Renewable Energy Transmission Authority (RETA) on the development of the transmission project in New Mexico.
Pattern Energy is one of the world’s largest privately-owned developers and operators of wind, solar, transmission, and energy storage projects. Its operational portfolio includes 30 renewable energy facilities that use proven, best-in-class technology with an operating capacity of nearly 6,000 MW across North America. Pattern Energy is guided by a long-term commitment to serve customers, protect the environment, and strengthen communities. For more information, visit www.patternenergy.com.
