Recurrent Energy, Southern Power take charge of 200-MW Tranquility project

Canadian Solar announced that its wholly owned subsidiary, Recurrent Energy, one of North America’s largest solar project developers, signed an agreement with Southern Power for Southern Power to acquire a controlling interest in the 200-MW Tranquillity Solar Power Project in California. The project, developed by Recurrent Energy, is currently under construction.

canadian-solar-logoUnder the terms of the agreement, Southern Power will acquire approximately 51% of the solar generation project. Canadian Solar will retain 49% ownership and contribute its share of the investment required to complete the construction of the project, which the company has fully financed through a construction and back-leveraged loan facility with a syndicate of six banks.

The Tranquillity project, covering an area of 1,900 acres in Fresno County, is expected to reach commercial operation in the fourth quarter of 2016 with Signal Energy Constructors as the provider of engineering, procurement and construction services. The project is expected to generate enough clean solar energy to power approximately 55,000 homes. The electricity and associated renewable energy credits (RECs) generated by the facility will be sold to Southern California Edison under a 15-year power purchase agreement.

“The Tranquillity project is an attractive opportunity for investors, providing long term stable cash flows,” said Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar. “This transaction is another example of solar power’s move into the mainstream energy mix, and it shows our broader team’s ability to attract top notch investors to finance our high-quality projects.”

Recurrent Energy has more than 4 GW of solar projects in development in North America.

More solar utility development news? Sure thing.

— Solar Builder magazine

Canadian Solar Expands Project Pipeline with $265 Million Acquisition

canadian-solar-logoCanadian Solar Inc., has entered into a definitive agreement with Sharp Corporation to acquire solar energy developer Recurrent Energy LLC, for approximately $265 million.

Once completed, the acquisition of Recurrent will increase Canadian Solar’s total solar project pipeline by approximately 4.0 GW to 8.5 GW, and its late-stage project pipeline by approximately 1.0 GW to 2.4 GW.

Located in California and Texas, Recurrent’s 1.0 GW late-stage pipeline is one of the largest utility-scale project portfolios scheduled to be built prior to the ITC expiration in 2016, and represents an estimated revenue opportunity of at least $2.3 billion for Canadian Solar under a build and sell business model.

“The acquisition of Recurrent is an important milestone for us as it significantly expands and strengthens our position in the North American market, and places Canadian Solar firmly among the leading global solar energy companies,” said Dr. Shawn Qu, Canadian Solar chairman and CEO. “By combining Canadian Solar’s global reach and experience with Recurrent’s proven solar energy development track record in the U.S. and Canada, we are significantly expanding the scale of our solar energy development platform. At the same time, this transaction broadens our strategic options to extend our business model from development and construction into potential ownership and operation of solar power plants as we work to create additional value for our shareholders.”

The transaction is expected to close prior to the end of the first quarter of 2015, subject to customary closing conditions and regulatory approvals.

The transaction further expands Canadian Solar’s position as a leading solar energy developer, with a globally diversified project pipeline in low risk geographies. In addition, this transaction broadens Canadian Solar’s project development and financing capabilities, and enhances the company’s position for creating its own Yield-Co in the quarters ahead.

“Canadian Solar is a key player in the industry and we are fortunate that our collective visions for the future of the solar market are very much aligned,” said Arno Harris, Recurrent Energy CEO. “We look forward to close collaboration with our new parent company to bring solar power further into mainstream energy markets.”

Credit Suisse acted as sole financial advisor and Foley & Lardner LLP acted as legal counsel to Canadian Solar. Scotia Capital (USA) Inc. acted as lead financial advisor to Sharp Corporation and Recurrent. The Bank of Tokyo-Mitsubishi UFJ, Ltd./MUFG Americas also acted as financial advisor to Sharp Corporation. Orrick, Herrington & Sutcliffe LLP acted as legal counsel to Sharp Corporation.

For more information on Canadian Solar, follow this link.

— Solar Builder magazine