Navajo Wind Energy has announced that it has received a confirmation letter of financing from Xiyas Development Capital for the Company's 50% joint venture partnership interest in the CSRI Xuzhou Nantung wind farm project.
This financing is in addition to the funding announced on January 20, 2009 and is debt based, which will not affect the capital structure of the Company.
As previously announced, this joint venture project is an operational 35MW wind farm, which completed construction in January 2009. CSRI Xuzhou Nantung Wind Farm Ltd. was established on June 23, 2004 and has diligently procured the installation and operation of their wind farm project to bring it online.
The facility's Phase I consisted of 10 wind turbines with a unit production capacity of 850kW each, Phase II has 10 wind turbines with a unit production capacity of 850kW each and the final completed Phase III of the project is 12 wind turbines with a unit production capacity of 1500kW each.
The total installed capacity is expected to be 35MW.
The 20 wind turbines' successful bid grid price is $0.081 per Kw hour with the remaining 12 wind turbines' successful bid grid price of $0.085 per Kw hour. At current levels, the operating profits for this project are expected to be $850,000 USD annually.
However, Navajo anticipates that the facility will improve profits to $1.2M USD in 2009, and going forward, with the combined effects of restructuring of the project's financing to more favorable terms through the Company's finance relationships and by improving the facility's operating efficiency with the application of new technologies to the production process.
"The financing of Navajo's first joint venture project further solidifies our strategic relationship with Xiyas Development Capital and will firmly put Navajo into a positive cash flow position for the first quarter of 2009," stated Barry Doyle, Navajo President and CEO.
Mr. Doyle will be travelling to China next week to sign-off on the due diligence process and facilitate the preparation of closing documents.
Navajo has also recently initiated the due diligence process with XDCL for the financing of a second wind farm joint venture project. This due diligence process is expected to be completed within 60 days.
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