SunEdison has teamed up with its yieldco TerraForm Power to acquire a portfolio of 521 MW worth of operating wind plants, previously owned by Atlantic Power.
The announcement was made on Monday, at the same time that SunEdison announced that it had also formed its second “warehouse facility,” TerraForm Private Warehouse, to hold the acquired operating assets from Atlantic Power for a maximum period of 7 years. The “warehouse facility” is currently worth $525 million in aggregate size, and is likely to hold onto the operating wind farms until TerraForm Power — who has exclusive call right over the assets held as part of the warehouse — can add them to its own portfolio.
Equity for TerraForm Private Warehouse was provided by Macquarie Capital, John Hancock, and SunEdison, with Morgan Stanley, Citi, and Goldman Sachs leading the structuring of the warehouse and provided debt in the form of a 7-year term loan.
The power plants specifically are located in Idaho and Oklahoma, and are currently under contracted long-term power purchase agreements (PPAs) with investment grade utilities. The PPAs for the 521 MW of wind farms have a weighted-average remaining life of approximately 18 years.
“We’re pleased to complete the closing of Atlantic Power’s operating assets utilizing TerraForm Private Warehouse, our new operating asset warehouse facility,” stated Brian Wuebbels, SunEdison chief financial officer. “This warehouse is integral to securing the future growth of the SunEdison-TerraForm platform, and provides repeatable and scalable funding. Based on the success of our first and second warehouses, we anticipate adding additional warehouse vehicles to address future acquisition opportunities.”
“SunEdison’s creation of the TerraForm Private Warehouse gives TerraForm Power additional flexibility to drive growth while enhancing visibility of our growth trajectory,” said Carlos Domenech, TerraForm Power chief executive officer. “TerraForm Private Warehouse creates a storage tank of growth supported by long-term, contracted operating assets which are expected to generate $44 million of annual cash flow. TerraForm Power’s ability to exclusively call these operating assets for drop down will support our intention to provide predictable CAFD and dividend growth for our shareholders for years to come.”
The 521 MW portfolio is expected to generate approximately $56 million per year, and an average annual CAFD (cash available for distribution) of $44 million over the next decade.
This continues the growth of SunEdison as the planet’s premiere renewable energy developer and owner. Formed in the first half of 2014, TerraForm is one of the initial yieldcos that have now begun springing up throughout the renewable energy industry, designed to own and operate operating renewable energy plants.
This is also not the first major acquisition for SunEdison and TerraForm, having sealed their acquisition of First Wind’s 500 MW worth of operating wind power plants (and 21 MW of operating solar plants) earlier this year in January,