Jimmie Creek Hydro:
Alterra has executed all major contracts for this 62 MW run-of-river hydroelectric project in coastal British Columbia. Full construction is underway, with nearly 100 workers currently active at the site. Road and bridge construction is now complete and work is well underway at the intake and powerhouse locations. Clearing for penstock excavation is nearly complete and subsurface conditions are in line with expectation. Through June 30, Alterra has invested C$21.2 million plus accrued legal expenses in the project in 2014, which will constitute the majority of its equity investment in the project.
Alterra is currently documenting a credit agreement with a group of four long-term fixed-rate lenders, and expects to close construction financing in the third quarter. Alterra will ultimately hold a 51 ownership stake in the project under a partnership agreement with a fund managed by Fiera Axium Infrastructure, Inc. The project is expected to achieve commercial operations in August 2016 and will sell 100 of its power to BC Hydro under a 40-year contract.
Alterra is in the final documentation stage for all major project contracts for this 204 MW wind generation project located in Clay County, Texas. Initial phase construction activities were completed by an affiliate of M.A. Mortenson Company in December 2013, with further design, geotechnical investigation and other work taking place subsequently in 2014. Alterra has invested US$13.1 million plus accrued legal expenses in the project during 2014, mostly comprised of reimbursable security deposits for the design and construction of the project's interconnection to the electric transmission grid.
Alterra expects to close construction financing for the project later this year with two lenders. Alterra will ultimately own up to 50 of the project under a partnership agreement currently being negotiated with a large energy infrastructure fund under the terms of a previously executed letter of intent. The project is expected to achieve commercial operations in the summer of 2015 and will sell the majority of its renewable power under a long-term hedging agreement with a financial institution.
Corporate Level Financing Updates:
Alterra is documenting a credit agreement with a lender for a holding company loan of up to C$110 million to support its equity investments into the Jimmie Creek and Shannon projects, and to potentially provide capital for other projects or general corporate needs. The loan would be supported by the equity cash flows from the Toba Montrose, Dokie 1, Jimmie Creek and Shannon projects. Alterra expects to close this loan in the third quarter of 2014.
In the interim period until closing of this financing, Alterra has agreed with its Executive Chairman, Ross Beaty, to enter into a second tranche of its revolving credit facility. The second tranche C$23.4 million will be extended under the same terms as the first tranche C$26.6 million, except that the annual interest rate will be 12 and the maturity will be the earlier of September 30, 2014 and three business days following the closing of the holding company financing. The current amount outstanding under both tranches is C$34.6 million.
A material change report for this transaction will be filed later this week. The closing and funding of the new revolver tranche occurred prior to such filing to keep the Jimmie Creek construction activities on schedule.
John Carson, Alterra's Chief Executive Officer, stated "Our teams are in execution mode on these important transactions, putting us on track to make 2014 a significant growth year for the company."
Alterra Power Corporation is a global renewable energy company, operating six power plants totaling 568 MW of generation capacity, including British Columbia's largest run-of-river hydro facility and largest wind farm, two geothermal facilities in Iceland, and a geothermal plant in Nevada. Alterra owns a 262 MW share of this capacity, generating approximately 1,300 GWh of clean power annually.