The initial equity commitment for the JV of $167m will be contributed by First Reserve and SunEdison over time. When combined with contemplated additional debt financing, these equity commitments are expected to fund the acquisition of solar assets developed by SunEdison with an enterprise value of $825m.
The agreement contemplates that depending on market conditions, development opportunities and existing capital of the JV, First Reserve may raise an additional $150m of equity which, when coupled with a corresponding increase in project debt financing, could scale the JV up to an aggregate of $1.5bn of solar projects developed by SunEdison.
Carlos Domenech, president of SunEdison, said: “The industry needs efficient and scalable financing models to meet demand. We expect the joint venture to help facilitate the development of our existing backlog of project opportunities and prospective projects that meet our development criteria.”
Mark Florian, managing director of First Reserve Energy Infrastructure, said: “This investment enables us to build a portfolio of high quality solar photovoltaic assets, utilizing mature technologies, in one of the fastest growing segments of energy infrastructure. We believe the portfolio will generate a predictable long-term cash flow suitable to our focus on long-term infrastructure markets.”
The JV will invest in projects in the US, Italy, Spain and Canada. SunEdison will lead the project identification and development process and First Reserve will lead the project financing efforts, the companies said.
Once constructed, the projects will be purchased by the JV and then operated and managed by SunEdison. Power generated by the projects will be sold pursuant to long-term Power Purchase Agreements or feed-in tariff arrangements.
