SunEdison is one of the world's leading solar project developers, with more than 350 solar electric power plants constructed and under management. First Reserve is one of the world's largest private equity and energy infrastructure investors, with $20 billion under management.
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.
The agreement contemplates that 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. SunEdison and First Reserve believe this joint venture will be one of the largest world-wide energy infrastructure enterprises focused on the long-term ownership of solar photovoltaic generation assets.
"We are excited to partner with First Reserve, a proven leader in energy infrastructure financing," said Carlos Domenech, President of SunEdison. "The industry needs efficient and scalable financing models to meet demand. We expect the joint venture to help facilitate the development of our existing backlog of project opportunities and prospective projects that meet our development criteria."
"SunEdison is a best-in-class partner due to its proven track record of developing, building, financing and operating solar photovoltaic electric power plants around the world," said Mark Florian, Managing Director of First Reserve Energy Infrastructure. "This investment enables us to build a portfolio of high quality solar photovoltaic assets, utilizing mature technologies, in one of the fastest growing segments of energy infrastructure. We believe the portfolio will generate a predictable long-term cash flow suitable to our focus on long-term infrastructure markets."
SunEdison and First Reserve will make capital contributions to the joint venture as qualifying projects are constructed in the targeted markets of the 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.
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