Atlantic Power has signed an agreement to acquire the membership interests of Cadillac Renewable Energy, a 39.6MW wood-fired facility located in Cadillac, Michigan, from a joint venture owned by ArcLight Energy Partners Fund II and Olympus Power.

The purchase price will be approximately $77m, subject to customary working capital adjustments, and will be funded by $35m of cash on hand and $42m of assumed non-recourse, project-level debt.

Operations and maintenance will be managed by Atlantic Power’s subsidiary Rollcast Energy.

The acquisition is expected to close later in the fourth quarter, and the company expects to receive distributions from the project in the range of $3.5m to $4.5m per year, starting in 2011.

Atlantic Power president and CEO Barry Welch said that the current acquisition market in both renewable and natural gas-fired electric power assets will continue to provide opportunities to execute on the company’s growth strategy.