SunEdison’s subsidiary TerraForm Power (TP) is acquiring 9 MW net ownership stake in a portfolio of operating distributed solar power plants from Duke Energy Renewables (DER). DER is a commercial business unit of Duke Energy. Terms of the transaction have not been revealed, PV Magazine reports.
Previously TerraForm had acquired 23 megawatt net ownership stake in the same portfolio from Integrys. The new acquisition takes Terraform’s total ownership in the 48-plant portfolio to 32 megawatts.
The solar projects were developed by a joint venture between DER and Integrys Energy and they are located in Arizona, California, Massachusetts, New Jersey and Pennsylvania.
All projects in the portfolio went into commercial operation between 2011 and 2013 and have working long-term power purchase agreements (PPAs) with commercial and municipal entities with weighted-average credit rating of Baa2. And on average the PPAs have 17 years left for completion.
The stakes that Terraform had acquired from Integra included projects in Connecticut, too. The assets had been placed into operation between 2008 and 2013, and were contracted under long-term power purchase agreements (PPAs) similar to DER. The contracts had weighted average remaining life of 15 years.
TerraForm closed the acquisition on June 3 utilizing existing balance sheet liquidity, according to a statement.
“These plants are expected to generate average levered CAFD of close to $5 million annually over the next 10 years. The equity consideration to be paid for the acquisition is $45 million.
“In addition, TerraForm Power will assume $10 million in project debt. This represents an expected levered cash-on-cash return of greater than 9 percent,” the statement added.
Ajith Kumar S