Navajos Laying the Groundwork For a $200 Million Wind Farm

DALLAS — With its first credit rating in hand, the Navajo Nation is preparing to finance a $200 million wind farm in a venture with Edison Mission Energy of Southern California.

The wind farm is expected to be built 80 miles west of Flagstaff on land jointly owned by the Navajos and the Arizona Land Department.

The site is not connected to the massive Navajo reservation that covers northwest Arizona, parts of Utah, and western New Mexico.

The project, expected to have a capacity of 85 megawatts, will diversify the nation’s energy portfolio, which includes oil, gas, and coal. In development since 2007, the project should be completed in 2013.

Plans call for the tribe’s Land Department to receive lease payments for the wind turbines near the town of Seligman.

The Salt River Project, another major energy utility in the state, plans to buy power from a nearby wind farm. Two other wind farms are also in development in the state.

The nation has two long-term loans outstanding. A $1.2 million loan matures in 2013, and a $60 million senior unsecured general obligation term loan matures in 2015.

The nation raised its sales tax by 1% and is setting aside 25% of its sales tax revenue for the payment of debt.

“It is our understanding the nation has considered rolling the debt over or converting it into a more traditional long-term GO bond,” Standard & Poor’s analyst Lisa Schroeer wrote in a May report conferring the nation’s first credit rating, which was A with a stable outlook.

Headquartered at Window Rock, and covering 27,000 square miles, the Navajo Nation is the largest federally recognized Indian tribe by size of the reservation and by population, according to Standard & Poor’s.

Edison Mission Energy is a subsidiary of Edison International in California. Edison also owns the Southern California Edison utility.

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