SunEdison has closed on a $160 million fund with Barclays and Citi to support 40 behind-the-meter projects across the United States. The mix of ground-mounted, rooftop and canopy PV systems has an average capacity of 1.1 MW, and all are owned by its yieldco subsidiary TerraForm Power.
SunEdison has by far the largest market share among U.S. developers for large distributed projects, which often hold power purchase agreements with site owners. The company has been creating various forms of multi-project funds for seven years, however it says that the lease-pass-through fund is a new form designed both to open up the tax equity market and create efficiencies.
The fund allows SunEdison to separate project cash flows from the tax credit returns, which the company says makes for an easier transaction for the tax equity. SunEdison also stresses that this allows non-traditional tax equity investors like commercial banks and corporations to participate.
We attempted to build a structure that would allow those participants to come into solar in a really simple way, and receive a very risk-protected return on their tax credit investment, says SunEdison VP of North America Project Finance Ryan Bennett.
This is the first time that SunEdison has developed a fund with either Barclays or Citi. Bennett says that he appreciates the participation of these companies in creating this novel structure, which he says can enable further beneficial financing structures due to the stability of the lease.
A structure like this can enable asset-backed securitization of the cash flows available to SunEdison or TerraForm, notes Bennett.