D. E. Shaw Renewable Investments, L.L.C. (“DESRI”) announced that ground has been broken at the site of the Red Horse 2 wind and solar project in Cochise County, Arizona. Torch Renewable Energy (“TRE”) began developing the 71-megawatt (AC) project in 2011 and secured its power purchase agreement (“PPA”) with Tucson Electric Power (“TEP”) in February 2013. DESRI provided development funding to the project in December 2013 and jointly completed its development with TRE over the subsequent eight months. DESRI subsequently acquired the project in August 2014 with senior debt from Santander Bank, N.A. and Banco de Sabadell, S.A., alongside a commitment for tax equity financing from U.S. Bank.
Swinerton Renewable Energy is designing and constructing the project, which will combine Vestas V110 wind turbines with Jinko Solar PV panels and Advanced Energy inverters. Swinerton will also provide ongoing operations and maintenance services to the facility once built. The project has a 20-year PPA with TEP and is expected to provide clean power to more than 13,500 homes in the TEP service territory, according to metrics provided by the U.S. Environmental Protection Agency.
“Red Horse 2 is one of the first combined wind and solar projects in the U.S., and we are proud to add it to the DESRI portfolio. We appreciate all of the hard work of our many partners in helping us to reach this important milestone,” said Bryan Martin, a managing director and head of U.S. Private Equity for the D. E. Shaw group. “We are happy to report that we’ve broken ground on the construction site and we are looking forward to completing and operating this project, so we can begin providing solar and wind energy to Arizona’s residents and businesses.”
Jorge Camina, Managing Director at Santander, said, “Santander is pleased to offer its extensive capabilities in the U.S. renewable energy market to DESRI in support of the Red Horse 2 project. We look forward to a fruitful partnership on this and other projects in future years.”
Enrique Castillo, Structured Finance Director of Banco Sabadell for the Americas, said, “We are excited about being part of this outstanding group of professionals that made the Red Horse 2 project possible and thrilled to help our clients succeed. This is what it’s all about for us at Banco Sabadell.”
David G. Hutchens, President and CEO of TEP, said, “We are excited to see Red Horse 2 start construction. TEP has enjoyed working with the development teams at Torch and DESRI to bring this world-class project to fruition. We believe that it will benefit our customers and our community for many years to come.”
Jon Kilberg, CEO of Torch, said, “We’ve been delighted to work again with the forward thinking leadership team at Tucson Electric Power, including Dave Hutchens and Carmine Tilghman, Senior Director of Wholesale, Fuels and Renewable Resources. Their vision has allowed Torch and DESRI to develop what will be the largest hybrid project in Arizona at competitive power prices, which we anticipate will be good for the consumer and the environment. DESRI has been a great partner in this process, helping us with capital and expertise to get Red Horse 2 across the finish line.”
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