TC’s Energy has executed a $2 billion prelisting financing term sheet with US-based equity firm Milost Global for the wave energy project in Ghana.
The financing is expected to be comprised of $1.5 billion in equity capital and $500 million in debt, with Milost committing to fund all the costs of moving the wave energy project from pilot to full production of 1000MW in return for equity in the company, TC’s Energy informed.
Milost will also finance the total cost of the initial public offering (IPO) for the company on the Nasdaq, according to Ghana-based power producer and wave energy projects developer TC’s Energy.
TC’s Energy is expected to appoint a US based securities counsel for the purposes of filing the necessary SEC form in the coming weeks, while Milost will immediately appoint US-based chairman, and Chief Financial Officer, to the Board of TC’s Energy who will oversee all the financial reporting and other financial aspects of the IPO.
Mandla Gwadiso , Chief Investment Officer of Milost Global, said: “Our aim is to help TC’s Energy’s move this plant from pilot to full scale. This is a very large transaction and we are hoping to PRE-IPO the transaction to create liquidity for all the shareholders and also raise additional capital on the market in order to build a strong war chest for the company beyond the wave project financing.
“This is very good for the economy and the people of Ghana as the power outages continue to affect a lot of businesses in Ghana, the livelihood of the people of Ghana and hinder economic growth.”
On this transaction, TC’s Energy was advised by its lead advisor Palewater Advisory Group, and assisted by MB Africa Investments, and Bridgewater Advisors.
To remind, TC’s Energy has signed a 20-year power purchase agreement with the government of Ghana through the government’s electricity utility company, Electricity Company of Ghana Limited (ECG).
According to the PPA, the government will purchase a total of 1000MW of electricity from TC’s Energy for a period of 20 years. This will translate into $950 million of annual revenues for TC’s Energy which values the contract at $17 billion, the company said.
The wave energy plant is located in Ada Estuary in Ghanian Greater Accra Region. The plant already completed its initial phase, which included the installation of six wave energy converters, supplied by Seabased, with the combined output of 400kW.