SunEdison mega deals to drive more private investment in wind, solar

“With its US$2 billion acquisition of 930MW of US wind farms from renewable energy developer Invenergy Wind LLC this week, SunEdison is making a landmark deal.

It is but the latest in a series of moves that suggest a pre-emptive strategy by SunEdison to get a material portfolio of global renewable-energy assets together so it can float an emerging-markets yieldco in the U.S.

A year ago this month, SunEdison rolled out its first developed markets yieldco IPO in the guise of TerraForm Power. That IPO debuted in July 2014 at US$25 per share; today it is trading for almost US$40.

The company’s Invenergy acquisition, announced Monday, builds enormously on its purchase last November 2014 of First Wind for US$2.4 billion. The two deals combined give SunEdison a sizable development pipeline for wind energy.

They also mean SunEdison controls one of the largest renewable energy portfolios in the world. Both are very material transactions that presage how Western equity and debt capital will now flow rapidly flow into the global renewable infrastructure sector. The company is setting a pace others are bound to follow.

All told over the past several months, it has acquired a portfolio of 757 megawatts of renewable-energy assets (wind, solar and hydro) through nine transactions in seven emerging markets (Brazil, Chile, China, India, Peru, South Africa and Uruguay).

It has also acquired more than twice that amount—1.9 gigawatts—of renewable-energy projects in the pipeline. And SunEdison has made a believer out of big-money investors, having attracted a US$175 million equity stake in the seven-market deal from the private equity firm the Blackstone Group and two others. The company also landed US$362 million in acquisition finance to support that move.

Here’s an abbreviated snapshot of some of the deals SunEdison has made in the past several weeks alone:

– A memo of understanding (2 July 2015) with the Spanish wind-turbine maker Gamesa to build up to 1 gigawatts of wind-powered electricity in target markets that include India and Mexico.

– Acquisition (16 June 2015) of Continuum Wind Energy, a Singapore company that owns 242 megawatts of wind-powered generation in the Indian states of Maharashtra and Gujarat.

– That seven-portfolio acquisition (7 May 2015) noted above, which includes 150 megawatts of wind-powered assets from Honiton Energy Holding (China) and102 megawatts of assets (India) owned by Fersa Energias Renovables of Spain.

– An equity investment in Imergy Power Systems (US), and the purchase of 1,000 energy-storage units from the company for installation across India.

SunEdison’s acquisition of Invenergy and its many renewable-energy holdings in the U.S. and Canada is a landmark deal, to be sure, that will help drive private-sector investment in wind and solar. SunEdison now has a 9GW pipeline of renewable projects under development or in planning.

But there is much, much more to come in the solar sector as a whole—in developed and underdeveloped countries alike.

 Tim Buckley is IEEFA’s director of Energy Finance Studies, Australasia.