Atlantic Power signs an agreement to acquire Allendale and Dorchester biomass project from EDF Renewables

Atlantic Power Corporation has signed an agreement with EDF Renewables to acquire two biomass projects in South Carolina for USD13 million. The two projects are the Allendale and Dorchester biomass plant, each with a nominal capacity of 20 MW, and has been in operation since November 2013. 

The two plants are identical in design and have been in commercial operation since 2013.  The biomass fuel for the plants consists primarily of mill and harvesting residues.  All of the output of the two plants is sold to Santee Cooper, a state-owned utility, under Power Purchase Agreements that run to 2043.  Under the terms of the PPAs, the plants receive energy payments for energy produced.  The fuel cost component of the energy revenues is based on a biomass market index.  There is no project-level debt at either plant.

Closing of the transaction is expected to occur late in the third quarter or in the fourth quarter of 2019, following a restructuring of the plants' ownership structure by EDF Renewables after the end of relevant tax credit recapture periods.  The transaction is not subject to regulatory approval.  Atlantic Power will assume operation of the plants at closing, or potentially earlier, subject to negotiation of an agreement with EDF Renewables.  The purchase will be funded from the Atlantic's discretionary cash.