Investors back renewable plans

THE world’s largest renewable energy development company, SunEdison, has been spending big over the past few days, expanding its empire in Central America and India, and closing a $520 million private placement for its subsidiary TerraForm Global.

Haydn Black

The Missouri-based company said it raised the funds via a private placement with institutional investors, including Baron Funds, Capricorn Investment Group, GE, Glenview Capital Management, Kingdon Capital Management and Zimmer Partners. The funds will be used to support its indirectly controlled subsidiary, formed to own and operate contracted clean power generation assets in emerging markets.

The funds were in addition to the $225 million raised in May.

It has a definitive agreement to acquire 100% of Globeleq Mesoamerica Energy, Central America's leading renewable energy company.

SunEdison will acquire a 70% interest in GME from Actis, a global pan-emerging market private equity investor focused on the energy sector, and a 30% interest from Mesoamerica Power.

The acquisition will solidify SunEdison's position as the largest renewable energy developer in Central America.

GME has four operating wind power plants with a capacity of 243 megawatts, a solar power plant with a capacity of 82MW in Costa Rica , Honduras and Nicaragua, 80MW of wind farms entering construction in Costa Rica and a pipeline of 246MW of wind under development in various countries across Central America.

SunEdison CEO Ahmad Chatila said the emerging Central American markets offer growth opportunities.

All of the operational and construction assets are contracted under long term US dollar-denominated power purchase agreements with local utilities or suppliers.

Assets in Honduras and Nicaragua have been insured by the World Bank's Multilateral Insurance Guarantee Agency.

In India, the company has agreed to acquire Continuum Wind Energy, which owns and operates 242MW of wind power plants in Maharashtra and Gujarat states, as well as 170MW of wind power under construction in Madhya Pradesh state, and has wind power plants in development across six states in India.

All the assets will sit within TerraForm once the deal closes later this year.

The acquisitions follow SunEdision’s recent award of five solar photovoltaic projects in South Africa, totalling 371MW under the fourth bid round of the Renewable Energy IPP Procurement Program organised by South Africa's Department of Energy, in which SunEdison previously announced that it had been awarded an 86MW solar project.

In total, SunEdison has won 457MW across six solar power projects in South Africa.

The five solar power plants will be located in the Northern Cape and North West Provinces and are expected to produce enough energy to power the equivalent of more than 200,000 South African homes.

Eskom, the South African national utility, will buy the solar energy under a 20-year power purchase agreement.

SunEdison entered the South African market in 2011 and has already developed, constructed and operates 130MW of utility scale solar power plants.

With the latest awards SunEdison becomes one of the leading solar energy providers in energy-starved sub-Saharan Africa.