Sol-Wind Renewable Power LP, a growth-oriented limited partnership formed to own, acquire, invest in and manage operating solar and wind power generation assets, filed an initial registration statement on Dec. 23 at the SEC.
These assets generate power for retail, municipal, utility and commercial customers under long-term power purchase agreements or similar contracts (PPAs) that generate stable, long-term contracted cash flows. The company’s objective is to pay a consistent and growing cash distribution to unitholders on a long-term basis. Upon completion of this offering, it will acquire from its general partner, Sol-Wind LLC, equity and debt interests in a diversified portfolio of 184.6 MW of nameplate capacity, or maximum generating capacity, solar and wind power generation assets in the United States (including Puerto Rico) and Canada (the “Initial Portfolio”).
“We intend to take advantage of favorable trends in the energy industry, including the continued construction of renewable energy assets to supplement existing and aging energy infrastructure; demand for renewable energy required to meet U.S. state renewable portfolio standards (“RPS”); availability of U.S. and overseas government incentives and programs to support development of clean energy; the rapid growth in non-utility customer demand for attractively priced renewable energy generation at a commercial or residential customer’s point of delivery, commonly known as “distributed generation;” improvements in solar and wind technological and operational efficiencies; and environmental concerns regarding conventional energy generation,” said the filing. “We believe these favorable trends will contribute to significant growth in the renewable energy industry, particularly from regional and local developers of renewable energy projects that are not associated with large utilities or energy firms.”
The company is focused on acquiring assets from middle-market developers, which is an area where it sees particularly compelling opportunities. It defines “middle-market developers” as those developers who typically, in the case of solar assets, develop projects of between 100 kW and 5 MW in nameplate capacity and, in the case of wind assets, between 1 MW and 10 MW in nameplate capacity.
The company said it believes it will have a competitive advantage in sourcing acquisition and investment opportunities because of its master limited partnership (MLP) structure. “We believe our structure allows us to utilize low-cost capital in the form of tax equity without affecting our ability to maintain an attractive level of distributions. We intend to leverage these advantages in executing on acquisition and investment opportunities, which will ultimately enable us to grow our distributions.”
At the closing of this offering, it will acquire the debt and equity interests in the Initial Portfolio from the general partner. The partnership agreement requires the general partner to offer to sell it any other renewable energy assets that it may acquire in the future and thereafter seek to sell.
The general partner’s equityholders are BKM LLC, an entity owned by members of its management team, and 40 North, which is a pooled investment vehicle managed by 40 North Management. 40 North Management is an SEC-registered investment firm founded by Managing Principals David S. Winter and David J. Millstone in 2009.