Wednesday, April 02 2014
Updated: Wednesday, April 02 2014
Last year SunEdison confirmed its intention to float a yieldco vehicle, taking advantage of a trend that has allowed a growing number of renewables developers to raise cheaper capital than they normally can.
In February SunEdison, which has nearly 2GW of operational PV capacity on its books, submitted a registration statement to US regulators regarding the planned IPO.
Today SunEdison announced that Goldman Sachs will extend an initial $250m loan facility to SunEdison Yieldco, which it will use to snap up projects owned by SunEdison as well as third-party developers.
At present SunEdison owns 100% of Yieldco, but SunEdison has previously stated its intention to float 20%-30% of the new company, aiming for an initial valuation in the neighbourhood of $800m-$1bn.
SunEdison has also suggested it may float a second, smaller Asia-based yieldco in Singapore or Hong Kong in the event that the US initial public offering is a success.
Other PV manufacturers-turned-developers -- including JinkoSolar and Canadian Solar -- are understood to be looking at yieldcos of their own.
Fundamental to the yieldco model is the reality that investors typically put a premium on renewables assets owned by a company whose sole purpose is to operate completed wind and solar plants -- compared to assets owned a company still exposed to development and construction risk.
While SunEdison has revealed little in the way of detail about its yieldco beyond today’s announcement, it would be expected to ‘drop down’ finished projects into the vehicle -- with SunEdison Yieldco likely to have first-buy rights over most or all SunEdison projects.
While around for several years, the yieldco model gained significant traction in the US and UK in 2013, with IPOs from the likes of Pattern Energy, NRG Yield and, in the UK, The Renewables Infrastructure Group (TRIG), which is backed by the developer RES.
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