The initial public offering (IPO) for SunEdison subsidiary TerraForm Power closed only yesterday, and already the company has purchased another very large solar project which the yieldco will have the option to acquire.
SunEdison bought the 156 MW-DC Comanche Solar project from developer Community Energy, which is in the final phases of development. The company is partnering with Community Energy to structure the final financing of the project, as well as providing procurement expertise.
SunEdison will manage construction of the project, which it expects to begin in 2015, deploying 400,000 of its solar PV modules. The company will additionally provide operations and maintenance services, including monitoring the project through its Remote Operations Center.
The Comanche Solar project holds a 25-year power purchase agreement with Xcel Energy, at a price which SunEdison says is competitive with the long-term forecast for natural gas-fired generation.
While SunEdison has emphasized that it is reserving its most profitable assets for the yieldco structure, yieldco expert Kieth Martin of law firm Chadbourne & Parke says that the rapid transfer of available projects to yieldcos is typical for the structure. These yieldcos are like vacuum cleaners they vacuum up assets, notes Martin.
TerraForm Power’s IPO closed on July 23rd, and the company netted $533 million through the public sale of a total of 23 million shares at $25 per share. TerraForm also received $65 million from a separate private placement.
The company is the third yieldco based on solar and wind assets which has held an IPO in the last two months, following on NextEra Energy Partners and Abengoa Yield. TerraForm is the first yieldco whose portfolio is comprised entirely of solar PV assets, and this portfolio includes large numbers of distributed PV systems in the United States and Canada.