Old Settler Wind, jointly owned by Apex Clean Energy (“Apex”) and Northleaf Capital Partners, has executed a 10-year proxy revenue swap with Allianz Risk Transfer (Bermuda) Limited (“ART Bermuda”) that will secure long-term predictable revenues and mitigate the energy generation volume uncertainty related to the weather as a fuel resource.
The proxy revenue swap, an innovative new risk management tool for the wind power industry, was created and commercialized through a collaboration among ART Bermuda, Nephila Capital Limited (Nephila Capital), REsurety, Inc. (REsurety), and Altenex, LLC (Altenex). This transaction represents the second 10-year proxy revenue swap to be sold, and the first to rely on the hedge to secure third-party commercial financing.
“Apex is pleased to have successfully closed the financing on this innovative revenue product, providing a new resource to further accelerate our nation’s shift to clean energy,” said Mark Goodwin, president of Apex.
“This transaction validates our thesis behind the proxy revenue swap—that it enables best-in-class financing options for wind projects through a unique and holistic approach to managing revenue risks,” said Karsten Berlage, managing director of ART Inc.
Old Settler Wind is a 151.2 MW facility in Floyd County, Texas, that will generate enough clean electricity to power 51,000 average U.S. homes. The project is part of a 217 MW portfolio that also includes Cotton Plains Wind and Phantom Solar, the debt financing and tax equity commitments for which were announced on July 14, 2016. The portfolio of projects is expected to achieve commercial operation in the first quarter of 2017.
Nephila Capital is ART’s strategic partner in weather risk management and works in collaboration with ART to manage and transfer risk exposures associated with the proxy revenue swap on behalf of its investors.
REsurety provides the risk analytics that enable the structuring and pricing of the proxy revenue swap and serves as the independent calculation agent for such transactions.