Two global renewable energy heavyweights, SunEdison and J.P. Morgan, have signed a strategic partnership to fund renewable energy projects.
SunEdison, the world’s largest global renewable energy development company, and J.P. Morgan Asset Management — Global Real Assets, with more than $85 billion in assets under management around the world — are set to team up to fund renewable energy projects in both the operating and construction phase.
The partnership will see J.P. Morgan’s clients provide equity to purchase renewable energy projects developed or purchased by SunEdison, with any remaining project costs expected to be funded through traditional, non-recourse commercial bank debt and tax equity.
First on the block for the partnership, which will be majority owned by J.P. Morgan’s clients, is expected to be the purchase of 33% interest in a 425 MW portfolio of solar projects currently owned by Dominion. Valued at $300 million and containing 24 projects across six US states, the deal will receive project debt financing, subject to certain conditions, from both KeyBank N.A. and Santander Bank, N.A.
“We began acquiring and developing long-term contracted solar projects in 2013 to build the knowledge and expertise in constructing, owning and operating utility-scale solar power before bringing that technology to Virginia,” explained Dominion Chairman, President, and CEO, Thomas F. Farrell II. “Meanwhile, during the past decade Dominion has worked to reduce risk and divest non-core assets and businesses. Our focus is shifting from constructing contracted solar to constructing utility solar in Virginia, where we expect to develop 400 megawatts of generating capacity by 2020.”
All proceeds from the strategic partnership between SunEdison and J.P. Morgan are expected to provide for payment of an agreed upon upfront development margin. SunEdison will have the ability to repurchase any of these projects, and any projects not called by SunEdison will continue to be owned by the partnership.
“This partnership supports SunEdison’s growth strategy while strengthening our liquidity,” said Paul Gaynor, executive vice president of SunEdison’s EMEA and Americas business unit. “Attracting strong investors such as J.P. Morgan Asset Management reinforces the breadth and depth of demand for ownership of renewable energy assets. We are pleased to leverage this new partnership to invest in Dominion’s diverse, domestic portfolio of solar assets without using any equity from SunEdison. This is our third transaction announced with Dominion in the last month.”
“We are pleased to have this opportunity to pursue this partnership with the leading global renewable energy company,” said Matt LeBlanc, chief investment officer of OECD Infrastructure at J.P. Morgan Asset Management – Global Real Assets. “These high-quality projects represent a significant and attractive investment in viable, long-term infrastructure assets for our investors in alignment with our partner, SunEdison.”
The announcement of SunEdison’s partnership with J.P. Morgan and interest in Dominion’s portfolio comes on the same day as SunEdison expanded a joint venture with Dominion to not only include a partnership around the 420 MW Four Brothers solar project in Utah, but now also the 265 MW Three Cedars solar project, also in Utah.
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