SunEdison buys 930MW of Invenergy wind projects

OREANDA-NEWS. July 08, 2015. SunEdison and its affiliate TerraForm Power have agreed to purchase 930MW of wind capacity from independent operator Invenergy for \\$2bn.

The deal consists of seven projects with contracts to sell power in Illinois, Nebraska, Texas and Ontario, marking SunEdison's first inroad into Canada. The deal is split into two portfolios, with the first containing the 78MW Raleigh farm in Ontario, 196MW California Ridge farm in Illinois, and the 187MW Rattlesnake facility in Texas. The second package, leveraged by a \\$995mn credit facility furnished by SunEdison and third-party equity investors, includes the 190MW Bishop Hill project in Illinois and a combined 279MW of expected capacity across the Prairie Breeze projects in Nebraska.

The deal continues SunEdison's recent acquisition of wind projects. It bought 521MW of First Wind assets and 521MW from Atlantic Power earlier this year. The deal with Invenergy is expected to close this year, pending review by the Federal Energy Regulatory Commission and Texas Public Utilities Commission.

Under the yieldco model, SunEdison acts as sponsor on acquisitions that boost TerraForm shareholder dividends from long-term power purchase agreements (PPAs). Yieldcos provide investors and shareholders with tax advantages. Their earnings are derived from long-term PPAs and a pipeline of acquisitions and parent-to-subsidiary transfers of generation assets.

TerraForm says it now has secured rights to about 6.8GW of operational and expected renewable capacity, up from 808MW when the company went public last year. The company says it expects to add to its portfolio.

"Today there are over 300GW of installed wind and solar power plants in our target market, and 275GW expected to come on line in the next five years," TerraForm chief executive Carlos Domenech said. "Many of these operating wind and solar power plants are held by non-strategic owners and we expect continued growth in aggregating this large and fragmented market as we leverage our platform."

Invenergy will retain about 10pc, or roughly 100MW, of capacity in the seven projects for operational purposes, though TerraForm said it expects to ultimately buy that capacity, bringing it to 100pc ownership.

Invenergy operates about 6.6GW of generation in wind, solar and natural gas-fired assets, with about 2.5GW of planned capacity in development,