Innergex has closed $583 million of financing for Boswell Springs, a 329.8 MW wind farm under construction in Wyoming. The project costs $576 million to build. So the lenders have committed more than the build cost, to a project that already had a sixth of its spending paid for. The explanation lies in how the package is cut, and in the 30-year contract that sits underneath it.
Key takeaways
- Innergex Renewable Energy closed a $583 million financing on 14 July 2023 for the construction of the 329.8 MW Boswell Springs wind project in Wyoming, United States.
- Innergex's $583 million Boswell Springs package comprises a $534 million construction and term financing, which includes a $203 million 10-year non-recourse term loan, plus a $49 million letter of credit facility.
- Boswell Springs has a total construction cost of $576 million, of which $103 million had already been funded through Innergex's revolving credit facilities, and a substantial portion of the first construction loan drawdown will repay that revolver.
- The output of Boswell Springs will be sold to PacifiCorp under a 30-year, 320 MW busbar PPA, and the project is expected to generate operating cash flow of about $22 million a year once operational in Q4 2024.
- BNP Paribas, Credit Agricole CIB, Export Development Canada and MUFG Bank acted as joint lead arrangers, and Boswell Springs uses GE Vernova onshore turbines with Mortenson as balance of plant contractor.
How can the financing exceed the cost of the project?
Because not all of it is cash for construction. The $49 million letter of credit facility is a bank guarantee line. It backs obligations owed to the project's counterparties, and no money moves unless an obligation is missed. Strip it out and the funded debt is $534 million.
Set that $534 million against the $576 million construction cost and the construction and term financing covers about 93 percent of the build. That is high gearing for a wind farm under construction, and the reason is the length of the contract behind it, covered below.
The other moving part is the revolver. Innergex had already spent $103 million on the project from its own corporate credit lines before the project financing closed. A substantial portion of the first construction loan drawdown repays that revolver. In effect, the parent fronted the early spending and the project debt now takes it back onto the project's own books.
Why does the term loan matter more than the headline?
Because it is the debt that stays. A construction loan funds the build and must be repaid or converted when the project starts operating. A term loan is the long-dated debt the operating project carries afterwards, repaid from its revenue. Here the term piece is $203 million over 10 years, on a non-recourse basis.
Non-recourse means lenders can look only to the project and its cash flows for repayment, not to Innergex's wider balance sheet. That is only workable when the project's revenue is predictable, which is where the PacifiCorp contract comes in.
Measured against capacity, the term loan comes to about $0.62 million per MW. The full $583 million package is about $1.77 million per MW. The record does not say how the rest of the construction financing is taken out at completion, and readers should not assume the gap is permanent debt.
How does a 30-year contract carry the debt?
By fixing the buyer and the delivery point for three decades. PacifiCorp, a Berkshire Hathaway utility, will take 320 MW of the project's 329.8 MW under a 30-year busbar PPA. A busbar PPA delivers power at the project's own substation, so the buyer takes responsibility for moving it across the grid from there. That removes transmission and congestion risk beyond the fence from the project.
Thirty years is a long contract for a wind farm and outlasts the 10-year term loan three times over. Lenders sizing debt against that contract are looking at a single utility buyer for the whole life of the debt and well beyond. That is what supports covering nearly all of the build with borrowing.
Tax credits add a second layer. The project is potentially eligible for 120 percent of the federal production tax credit under the Inflation Reduction Act. A production tax credit pays a fixed amount per MWh generated. Boswell Springs qualifies for the Energy Community bonus, which raises the credit by 10 percent, while eligibility for the 10 percent Domestic Content bonus was still being evaluated.
Enerdatics records five US wind debt financings announced in 2023, and two of them are single-project construction financings for wind farms selling to PacifiCorp. The other is Clearway's 152 MW Cedar Creek project in Idaho, financed in August 2023 with $481 million: about $322 million of construction and equity bridge loans, $37 million of letters of credit and a $122 million term loan, under a 25-year PacifiCorp PPA. Cedar Creek's term loan works out at about $0.80 million per MW against Boswell Springs' $0.62 million, while its total package is $3.16 million per MW against $1.77 million. The headline totals are not comparable because bridge loans inflate them. The term loans are the cleaner comparison.
What does the deal signal for US wind finance?
It signals that long utility contracts remain a bankable foundation for US wind, and that PacifiCorp is a buyer lenders are comfortable sizing against. Two Wyoming and Idaho projects closed construction debt within three weeks of each other in mid-2023, both underpinned by PacifiCorp contracts of 25 and 30 years.
It also shows the role of the corporate revolver in project development. Innergex used its own credit lines to keep construction moving before project debt closed, then recycled that capacity through the first drawdown. Corporate liquidity bridges the gap between notice to proceed and financial close, and project lenders take over once the contract and permits are in place.
Innergex has used other structures for its US assets since, including tax credit transfers. Its $54.4 million investment tax credit financing with Foss and Company for the Hale Kuawehi solar and storage project in Hawaii shows the same developer drawing on the Inflation Reduction Act's transfer route for a different technology.
Frequently asked questions
How much financing did Innergex raise for Boswell Springs?Innergex closed $583 million, made up of a $534 million construction and term financing, including a $203 million 10-year non-recourse term loan, and a $49 million letter of credit facility.
Who buys the power from Boswell Springs?PacifiCorp buys the output under a 30-year, 320 MW busbar PPA. The 329.8 MW project was expected to start operating in Q4 2024.
Which banks financed Boswell Springs?BNP Paribas, Credit Agricole CIB, Export Development Canada and MUFG Bank acted as joint lead arrangers for the financing.
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