Enel Green Power S.p.A., the renewable energy division of Italy's largest utility, has announced that a consortium of investors led by JPMorgan Chase would invest some $340 million in two U.S. wind farms in return for a stake in the projects and voting rights.
Under the tax equity-partnership agreement, the consortium—which includes MetLife Inc. and Wells Fargo & Co.—will funnel the cash into Rocky Ridge, an Oklahoma-based plant, and the Carney River Wind Farm in Elk County, Kansas, projects that have a combined electricity generation capacity of 350 megawatts and existing long-term purchasing power contracts.
Using "tax equity" financing allows banks and insurance companies to take an equity stake in clean energy projects in exchange for a 30% federal tax break (either in the form of a tax credit or a cash payment equal to project cost) when operations are profitable. Financiers also benefit from accelerated depreciation of the assets invested in the project, which also helps to lower their tax burden.
Enel Green Power North America, Inc. currently owns and operates wind and solar projects in 21 states and three Canadian provinces. The company's European arm has been busy on the continent, recently financing and launching wind farms in Italy, Portugal and Romania.
In closing the deal with Enel, JPMorgan Chase is delivering on a promise made last year to grow its tax-driven investments in the renewable and clean energy sectors. The nation's biggest bank is one of the largest tax equity investors in wind in the United States.
Image credit: Penny Higgins via Flickr
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