Letters of credit (L/Cs) have helped a very substantial wind power project in the US state of Texas reach financial close.

Developer Alterra Power and its partners now have the US$529 million of financing they needed to go ahead with the ambitious 200 megawatt Flat Top wind farm in central Texas.

Loan-L/C package

Affiliates of Citibank along with Santander and the Royal Bank of Canada have agreed to provide a loan of US$217 million alongside L/Cs totalling US$71 million.

The total amount of US$287 million will be used for the construction of the wind farm.

Equity stakes

The loan and L/C package was secured after private equity house BlackRock Real Assets acquired a 49 per cent stake in the wind farm.

Alterra holds the remaining 51 per cent.

Loan repayment

Berkshire Hathaway Energy and Citibank's affiliates have also committed to provide US$221 million of equity investment, which will only be realised when the wind farm starts commercial operations.

Alterra plans to use that equity to repay the loan taken for the wind farm's construction.

Commissioning and start of commercial operations are expected in the first half of 2018.

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