TerraForm Power, the spin-off yield co unit of US PV provider SunEdison, has added to its growing portfolio with 77.6MW of distributed generation solar plants in the US.
The company bought the assets from Capital Dynamics US Solar Energy Fund, a private equity operation focused on solar energy in the US.
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The 39 projects acquired under the deal are spread across five US states – California, Massachusetts, New Jersey, New York and Pennsylvania – and have an average remaining contract life on their power purchase agreements of 19 years.
The deal represents the second batch of projects TerraForm has acquired from a third party, as opposed to its progenitor, SunEdison. Earlier this month TerraForm announced the joint acquisition of Hudson Energy Solar with SunEdison and with it 25.5MW of operating projects.
“This transaction demonstrates TerraForm Power's momentum in delivering on our growth strategy and our ability to execute third-party acquisitions,” said Carlos Domenech, chief executive of TerraForm Power. “These high quality assets are expected to provide TerraForm Power with an attractive levered cash-on-cash return of approximately 9% while adding further geographic and cash flow diversification. The transaction continues to cement our leadership position in the fragmented distributed generation marketplace.”
TerraForm Power will pay U$250 million for the portfolio. It will use debt financing to fund the deal, having increased an existing term loan facility by US$275 million and increased the size of its existing revolving credit facility to US$215 million. It said these capital increases would also fund the previously announced Hudson Energy acquisition.
“Today's announcement underscores TerraForm Power's ability to work with world-class partners in acquiring high quality portfolios. It also demonstrates TerraForm's scalable capabilities in underwriting and managing large portfolios of power plants,” Domenech added.