SunEdison, the solar development division of MEMC Electronic Materials, Inc. (NYSE: WFR), announced a joint venture with private equity firm First Reserve Corporation that could fund up to $1.5 billion in photovoltaic projects.
The joint venture will look to build projects in United States, Italy, Spain and Canada.
SunEdison will lead the project identification and development process
and First Reserve will lead the project financing efforts. Once
constructed, the projects will be purchased by the joint venture 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.
The initial equity commitment for the joint venture of $167 million 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 $825 million.
First Reserve is one of the world’s largest private equity and energy
infrastructure investors, with $20 billion under management.
Depending on market conditions, development opportunities and existing capital of the joint venture, First Reserve may raise an additional $150 million of equity which, when coupled with a corresponding increase in project debt financing, could scale the joint venture up to an aggregate of $1.5 billion of solar projects developed by SunEdison.
Carlos Domenech, President of SunEdison said the joint venture will help facilitate a backlog of project opportunities.
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