Capital Power adds 250 megawatts of long-term contracted wind generation to its renewable portfolio - Seite 2

Buckthorn Wind has two offtake arrangements with an investment grade U.S. financial institution involving a 20-year contract for differences (CfD) for 55% of the generation output, and a 13-year financial hedge for the remaining 45% of the output.  

Buckthorn Wind has a tax equity investor that receives the tax benefits and a portion of adjusted EBITDA and cash flow until the flip-date that is projected to occur in the late 2020’s. Prior to the flip-date and based on an equity purchase price of US$60 million, the Company expects average annual adjusted EBITDA and AFFO to be approximately $18 million and $1 million, respectively. After the flip-date during the CfD, the average annual adjusted EBITDA and AFFO is expected to be approximately $9 million and $6 million, respectively.

Buckthorn Wind utilizes 29 Vestas turbine generators and has a Service and Maintenance Agreement with Vestas. Capital Power expects to assume the Operations Manager role in early 2021 to replace the current third party Operations & Maintenance Services Agreement.

Non-GAAP measures
The Company uses AFFO as a financial performance measure of the ability of the Company and its subsidiaries to generate cash from current operating activities to fund growth capital expenditures, debt repayments and common share dividends to the Company’s shareholders. The AFFO performance measure represents net cash flows from operating activities adjusted to include net finance expense and current income tax expense and exclude changes in operating working capital and distributions received from the Company’s joint venture interests. Net finance expense and current income tax expense are included as the timing of cash receipts and payments of interest and income taxes and the resulting cash basis amounts are not comparable from period to period. Changes in operating working capital are excluded from AFFO as the timing of cash receipts and payments also affects the period-to-period comparability. Distributions received from the Company’s joint venture interests are excluded as the distributions are calculated after the effect of joint venture debt payments, which are not considered operating activities. AFFO is reduced by the tax equity financing project investors’ shares of AFFO associated with assets under tax equity financing structures to ensure that only the Company’s share is reflected in the overall metric. AFFO also excludes the impact of fair value changes in certain unsettled derivative financial instruments that are charged or credited to the Company’s bank margin account held with a specific exchange counterparty. AFFO is reduced by sustaining capital expenditures and preferred share dividends and adjusted to include the Company’s share of the AFFO of its joint venture interests and cash from coal compensation that will be received annually.