SunEdison and Canadian Solar Move Forward on Solar Projects

Energy

Published: September 8, 2015 12:15 pm

Last Updated: April 28, 2020 5:38 am

Less than a week after saying that SunEdison Inc. (NYSE: SUNE) would be focusing on generating cash, the company’s chief executive officer Tuesday announced that the company is paying $300 million to acquire a 33% stake in the solar assets of Dominion Resources Inc. (NYSE: D). At the same time the two companies also announced a joint venture to build a new 265-megawatt DC solar project called Three Cedars to be developed by SunEdison in Utah.

In mid-August SunEdison and Dominion signed another joint venture deal for a 420-megawatt DC solar farm also located in Utah. That project is called Four Brothers and is fully financed and scheduled to begin operation next year with a 20-year power-purchase agreement with PacifiCorp, a subsidiary of Berkshire Hathaway Inc. (NYSE: BRK-A).

Dominion will invest approximately $320 million in Three Cedars to acquire 50% of the cash equity and 99% of the tax equity, including construction funding. Dominion paid approximately $500 million in the joint venture for Four Brothers. Both projects are included in the Call Right Projects List for SunEdison yieldco TerraForm Power Inc. (NASDAQ: TERP). The list includes assets TerraForm has an option to buy once the projects are completed.

SunEdison’s purchase of the Dominion assets is being made by a joint venture between SunEdison and institutional investors, advised by JPMorgan. SunEdison has a future option to buy all or a portion of Dominion’s remaining 67% ownership in the product portfolio.

At the same time as SunEdison and Dominion were making these deals, Canadian Solar Inc. (NASDAQ: CSIQ) announced that its wholly owned subsidiary, Recurrent Energy, had secured financing for a 100-megawatt project currently under construction in California. Santander Bank will provide a $165 million construction loan, a tax equity bridge loan and a term-loan option for the Mustang solar project. U.S. Bancorp Community Development Corporation is making a tax equity investment in the project under a separate agreement.

The Mustang project is expected to be completed in the fourth quarter of 2016, and the electricity and associated renewable energy credits (RECs) will be sold under long-term power-purchase agreements.

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SunEdison stock traded up about 4.8% Tuesday morning, at $12.56 in a 52-week range of $8.10 to $33.45.

Dominion’s shares traded up about 1.2% to $68.00, in a 52-week range of $65.53 to $80.89.

Canadian Solar traded higher by about 3.5%, at $18.95 in a 52-week range of $14.16 to $41.12.

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