TerraForm Power Inc (TERP)
Q2 2020 Earnings Call
Aug 14, 2020, 10:00 a.m. ET
- Prepared Remarks
- Questions and Answers
- Call Participants
Good day, ladies and gentlemen, and welcome to the TerraForm Power 2020 Second Quarter Results Webcast and Conference Call for Investors and Analysts. As a reminder, this conference is being recorded.
I would now like to turn the conference over to Michael Tebbutt, Chief Financial Officer. You may begin.
Michael Tebbutt -- Chief Financial Officer
Thank you, operator. Good morning, everyone, and thank you for joining us for 2020 second quarter results conference call and webcast. Before we begin, I'd like to remind you that a copy of our quarterly financial report can be found under the Financials and SEC Filings page on our website at terraformpower.com.
Note also, that we'll -- may make forward-looking statements on this call. These forward-looking statements are subject to known and unknown risks, and our actual results may differ materially. For more information, you're encouraged to review the Risk Factors section in our SEC filings, which can be found on our website.
In addition, we'll refer to non-GAAP financial measures. For more information on a reconciliation of these non-GAAP measures to comparable GAAP measures, please refer to the supporting reconciliation document we posted on our Events and Presentations page on our website at terraformpower.com.
I'd like to begin by making a few comments related to our recent merger transaction. As recently announced, we completed the merger transaction with Brookfield Renewable and TerraForm Power on July 31, and TerraForm Power's common shares were delisted from the Nasdaq Stock Market. We believe the merger will have an immediate positive impact to TerraForm Power's business.
The combined company will be one of the largest, integrated, and pure play renewable power companies in the world, with one of the strongest investment grade balance sheets in the sector, with no material near-term maturities, and a 20-year track record of creating shareholder value through multiple economic cycles. This combined company will also benefit from a simplified ownership structure as well as continued sponsorship by Brookfield Asset Management.
In terms of the COVID-19 pandemic's impact to TerraForm Power's operations, we have not seen and do not expect a significant impact on the performance of our critical infrastructure assets due to our contracting nature of our cash flows, the scale of our business, and our market and offtake diversification. We are confident on the resiliency of our business and operations, given the nature of our long-term stable cash flows, 95% of which are secured by long-term contracts with an average duration of 14 years across a diverse set of investment grade customers.
Turning to our operations, at this time, we have signed substantially all long-term service agreements with SMA Solar Technology for the majority of our North American solar O&M provider, which corresponds to close to 1,000 megawatts. During quarter two, we transitioned around half of 480 megawatts of projects to SMA, and we're on track for the remaining sites to transition by September.
I'm also pleased for report that in June, we signed a number of key transaction agreements in connection with the $165 million repowering, about 160-megwatt Cohocton and Steel Winds facilities in New York. These include a framework agreement with GE, which secures 80% PTC eligible turbines, and is comprised of detailed term sheets for the turbine supply agreement, and a 20-year full-wrap LTSA O&M agreement, a 12-year power purchase agreement, and a tax equity term sheet with two large financial institutions. We're targeting, finalizing all material project agreements in the third quarter, and continue to expect the project to generate attractive returns. We remain on track to commence construction in the first half of 2021.
From a financial performance perspective, in the second quarter of 2020, TerraForm Power delivered adjusted EBITDA of $216 million. This represents an increase in adjusted EBITDA of $20 million compared to the same period in 2019. Performance in the quarter was positively impacted by contributions from our acquisitions of utility scale solar assets in Spain and DG solar assets in the United States, which took place in late 2019 and early 2020, as well as by performance guarantees and cost savings achieved from the implementation of our long-term service agreements with our O&M providers. These contributions were offset by lower market power prices due to COVID-19 pandemic and lower results in Spain. The lower impact of -- sorry, the impact of lower prices in Spain will be mitigated through price ban adjustment mechanism defined under the Spanish regulated revenue framework, whereby, any shortfalls in the actual power price compared to the forecasted power price, are recouped in future periods through an increase in the capacity payments that our assets receive.
In terms of the debt and a liquidity uptake, from a non-recourse debt perspective in June, we closed on a 16-year EUR463 million refinancing of our recently acquired 100-megawatt portfolio of CSP projects in Spain at attractive terms that exceeded our initial underwriting.
At the end of quarter two, we had $693 million of corporate liquidity, which is ample liquidity to fund our capital requirements and growth initiatives. Overall, 93% of our total debt is fixed rate or swapped debt, and we continue to have a very manageable corporate debt stack with no corporate maturities until 2023.
That concludes our remarks for today. If you have any questions, please don't hesitate to contact our Investor Relations team at [email protected] Thank you.
[Operator Closing Remarks]
Questions and Answers:
Duration: 7 minutes
Michael Tebbutt -- Chief Financial Officer