Southern Co. (NYSE: SO) subsidiary Southern Power has acquired a controlling interest in the 157-MW Roserock solar facility – the company’s first solar project in Texas – from Recurrent Energy, one of North America’s largest solar developers.
The facility is being developed by Recurrent Energy, a subsidiary of Canadian Solar, which will retain the remaining interest in the project. The electricity and associated renewable energy credits generated by the facility will be sold under a 20-year power purchase agreement with Austin Energy.
“Southern Power’s first solar project in Texas helps further the company’s robust wholesale business and further expands our solar footprint,” said Southern Power President and CEO Oscar C. Harper in a Nov. 30 statement. “With strategic acquisitions nationally, the continued development of industry-leading assets aligns with our company’s low-risk strategy and enhances one of America’s largest renewable portfolios.”
Representing Southern Power and Recurrent Energy’s second partnership arrangement, the project, currently under construction, is expected to enter commercial operation in the fourth quarter of 2016.
“Cost-competitive, large-scale solar power has enormous potential in Texas,” said Canadian Solar Chairman and CEO Shawn Qu. “The Roserock project and Recurrent Energy’s solar project pipeline in the state are each important steps forward as Texas approaches the more than 13 gigawatts (GW) of solar that has been forecasted across the state.”
McCarthy Building Companies is providing the engineering, procurement and construction of the Roserock solar facility, which is expected to create approximately 500 local construction jobs. Located on 1,300 acres of land in Pecos County, Texas, the facility will consist of approximately 700,000 Canadian Solar CS6X-P photovoltaic solar modules, mounted on single axis trackers. The facility layout was developed in cooperation with mineral operator Apache Corp.
Southern Power has announced, acquired or is constructing more than 1,700 MW of renewable asset ownership with 23 solar, wind and biomass projects. Southern Power’s 20th solar acquisition, the Roserock solar facility fits Southern Power’s business strategy of growing its wholesale business through the acquisition and construction of generating assets substantially covered by long-term contracts.
Under the terms of the agreement, Southern Power will acquire 51% of the equity in the Roserock project. Canadian Solar will retain 49% ownership and contribute its share of the investment required to complete the construction of the project, which the company has financed through a construction and back-leveraged loan facility with a syndicate of five banks.
This transaction represents Recurrent Energy’s second partnership with Southern Power, which also holds a controlling interest in the Tranquillity solar facility in California.
Canadian Solar separately announced on Nov. 30 that Recurrent Energy has closed on a combined construction and term debt facility, with a syndicate of five banks, for the Roserock project. With KeyBank as the Coordinating Lead Arranger, five banks, including Rabobank, Santander, NORD/LB, and CIT will provide project-level construction debt, LC facilities and a back-leveraged term facility, totaling approximately $275 million.
“This top tier group of financiers’ attraction to the Roserock solar project is a clear indication that large-scale solar can compete and succeed in competitive energy markets like Texas,” said Qu. “This agreement is a testament to our broader team’s ability to deliver bankable solar projects with strong fundamentals.”
“This is our fourth transaction with Recurrent Energy in 2015. We are proud to continue our working relationship and view Roserock as a strong investment in the fast growing Texas solar market,” said Andrew Redinger, Managing Director and Head of KeyBanc Capital Markets Utilities, Power & Renewables Group.
Founded in 2001 in Canada, Canadian Solar (NASDAQ: CSIQ) has a geographically diversified pipeline of utility-scale power projects. In the past 14 years, Canadian Solar has successfully deployed over 12 GW of premium quality modules in over 70 countries around the world.
With more than 4.5 million customers and approximately 46,000 megawatts of generating capacity, Atlanta-based Southern Co. is the premier energy company serving the Southeast through its subsidiaries.