Innergex Renewable Energy Inc. closed the acquisition of the 250-MW solar Phoebe Energy Project in Winkler County, Texas, from Longroad Energy Partners LLC.

Innergex said the plant is expected to have an average annual output of approximately 738,000 MWh. The Phoebe solar facility will sell its power to the Electric Reliability Council of Texas, with 89% of the generated capacity receiving a fixed price under a 12-year power purchase agreement with Royal Dutch Shell PLC subsidiary Shell Energy North America. The remainder of the project's output will receive a merchant market price, and will also receive revenues through the sale of renewable energy certificates.

The project's construction costs are estimated to be roughly $397 million, $292 million of which will be financed by the Energy Finance unit of CIT Group Inc. Innergex said it will fund a $105 million equity commitment after the debt is fully drawn.

Upon the commencement of commercial operations in third-quarter 2019, a Wells Fargo subsidiary is planned to fund the tax equity investment, which will help repay the tax equity bridge loan, with the balance being distributed to Innergex, according to a July 2 release.

Innergex expects the project to generate adjusted EBITDA of approximately $20.2 million for one year of operations. The project will also receive a federal investment tax credit, allocated to the tax equity partner, sized to approximately 30% of the project's capital costs.

After seven years of operations, Innergex expects approximately 95% of the estimated adjusted EBITDA, or about $19.6 million, will be available to Innergex for distribution before debt service.

Longroad Energy Holdings, LLC is the ultimate parent of Longroad Energy Partners.