RECOMMANDATION FROM NA BANK DJ Northland Power Can Absorb Higher Price for Windfarm in Poland -- Market Talk
0741 ET - Northland Power should be able to navigate the higher cost for the 1,140 MW Baltic offshore wind project in Poland, National Bank of Canada's Rupert Merer says in a report.
The total cost of the project, for which NPI has a 49% stake, is forecasted to be $6.5 billion, higher than the $6 billion assumed earlier. It has have signed a credit agreement for $5.2 billion with its partner Orlen, but inflation to costs is being covered by indexation on the 25-year offtake agreement which will preserve returns, the analyst says. "The leverage, at 80%, is also higher than what we anticipated, but should be covered by cash flows on the project as the debt is amortized over 20 years," Merer adds.(adriano.marchese@wsj.com)