Pattern Energy Group has announced a series of strategic initiatives to significantly increase Pattern Energy's long-term growth outlook and enhance its access to capital.
Collectively, these strategic initiatives position Pattern Energy to capture an increased share of the annual $250 billion global renewable energy market, and support its Pattern 2020 vision to double its portfolio to 5 gigawatts by 2020.
The initiatives include a major increase in capital committed to Pattern Development 2.0, and a minority investment by Pattern Energy, as well as a significant expansion of the development pipeline.
In addition, Pattern Energy has created a strategic relationship with PSP Investments, aligning it with one of the world's leading long-term institutional investors. PSP Investments will have a direct ownership stake in Pattern Energy and co-invest in projects.
PSP Investments has plans to co-invest $500 million in projects acquired by Pattern Energy under the company’s right of first offer (ROFO) with Pattern Development, including investments in the Meikle, Mont Sainte-Marguerite and Panhandle 2 projects.
Pattern Energy paid $65 million for a 51 percent interest in the 179-megawatt Meikle project from Pattern Development 1.0. PSP Investments will acquire the remaining 49 percent.
And Pattern Energy paid $40 million for a 51 percent interest in the 143-megawatt Mont Sainte-Marguerite project from Pattern Development 1.0 at the project's commercial operations date, which is expected to be in the first quarter of 2018. PSP Investments will acquire the remaining 49 percent.
On the selling side, Pattern Energy sold 49 percent of the class B interest in the 182-megawatt Panhandle 2 project to PSP Investments for $59 million.
Pattern Development 2.0 will initially own development assets, subject to Pattern Energy’s ROFO rights, and focus on wind, solar, transmission and storage projects in the United States, Canada and Mexico (excluding the Grady and Crazy Mountain projects, which are owned by Pattern Development 2.0[This is confusing – Pattern Development 2will own development rights except for these two projects which are owned by Pattern Development 2. Is something missing?]).
To enhance alignment and allow Pattern Energy to benefit from development, Pattern Energy has agreed to an initial investment of $60 million in Pattern Development 2.0, which will result in an initial ownership of approximately 20 percent. Pattern Energy will have the right, but not the obligation, to participate in subsequent capital calls for a total commitment of up to $300 million.