SunEdison buys, and then resells, first group of solar assets from Dominion

SunEdison Inc. (NYSE: SUNE) announced Dec. 30 that it has acquired a 33% ownership interest in a 336-MW (dc) portfolio of operating solar power plants from Dominion Resources (NYSE: D) for an equity purchase price of $180 million plus a working capital adjustment.

Terra Nova Renewable Partners, the strategic equity partnership formed between SunEdison and institutional investors advised by J.P. Morgan Asset Management–Global Real Assets, simultaneously acquired SunEdison’s interest in the transaction.

This acquisition is the first of two phases of a deal announced in September 2015. The entire solar portfolio consists of 24 projects, with a total capacity of 567 MW (dc) located in Indiana, Georgia, Connecticut, California, Tennessee and Utah. This first phase of the transaction is for 15 projects that generate 336 MW (dc), and the second acquisition is for the remainder of the portfolio. The second phase of the transaction is expected to close in early 2016.

The solar portfolio’s power output has been contracted with industry leading utilities and power offtakers with a weighted remaining contract term of 19.8 years. The partnership, through an indirect subsidiary, has the option to buy the remaining 67% of the portfolio upon the occurrence of certain triggering events.



















Asset

  Megawatt Capacity (DC)

  Development Status

Indy Solar I

  13.9

  Operating

Indy Solar II

  13.9  

  Operating

Indy Solar III

  11.9

  Operating

Azalea

  9.7

  Operating

Somers

  7.4

  Operating

Camelot

  59.1

  Operating

CID

  27.2

  Operating

Kansas

  27.1

  Operating

Kent South

  26.3

  Operating

Old River One

  26.8

  Operating

West Antelope Solar Park

  28.4

  Operating

Adams East

  24.9

  Operating

Mulberry 

  20

  Operating

Selmer

  20

  Operating

Columbia Two

  19.4

  Operating

The strategic partnership was announced in September 2015. Under the partnership commitment, J.P. Morgan’s clients are expected to provide equity to purchase renewable energy projects developed or purchased by SunEdison. Remaining project costs are expected to be funded with a combination of limited-recourse commercial bank debt and tax equity.

SunEdison has the option to repurchase the projects from the partnership for a period of five years and may assign TerraForm Power Inc. (Nasdaq: TERP), a global owner and operator of clean energy power plants, call rights to the projects should they be repurchased. Any projects not repurchased by SunEdison would continue to be owned by the partnership.

To date, SunEdison has sold or otherwise transferred 633 MW (ac) of wind assets and 336 MW (dc) of solar assets to the partnership.

Dominion on Dec. 30 separately announced that it has closed on the first phase of its previously announced sale of a 33% ownership interest in 425 MW (ac) of solar capacity to SunEdison. It said the second phase is expected to close by early 2016 for about $120 million, subject to working capital and certain other adjustments. It consists of a 33% ownership interest in nine projects in three states totaling 172 MW (ac) of generating capacity. Dominion expects to pay down debt with the cash proceeds.

Dominion is one of the nation’s largest producers and transporters of energy, with a portfolio of approximately 24,600 MW of generation, 12,200 miles of natural gas transmission, gathering and storage pipeline, and 6,490 miles of electric transmission lines.

SunEdison develops, finances, installs, owns and operates renewable power plants, delivering predictably priced electricity to its residential, commercial, government and utility customers. SunEdison is one of the world’s largest renewable energy asset managers and provides customers with asset management, operations and maintenance, monitoring and reporting services. Corporate headquarters are in the United States with additional offices and technology manufacturing around the world.

J.P. Morgan Asset Management–Global Real Assets has more than $87 billion in assets under management and more than 400 professionals in the U.S., Europe and Asia Pacific, as of September 30, 2015. The Global Real Assets team is part of J.P. Morgan Asset Management’s Alternatives Investments business, which collectively manages over $120 billion in client assets across real assets, hedge funds, credit and private equity.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.