Sol-Wind Renewable Power is looking for an end-of-year stocking stuffer to support it’s growth in clean energy developments like wind and solar power. The company filed an IPO (initial public offering) with the U.S. Securities and Exchange Commission today (Dec. 23) to raise $100 million to support its purchase of more solar and wind power plants as a YieldCo. In addition to filing with the SEC, the company also filed with the New York Stock Exchange to be listed as SLWD.
The company joins a growing number of other companies that are creating YieldCos, securities, master limited partnerships and other means of financing solar projects that allow them to raise projects funds at lower interest rates than conventional bank financing. The largest announced in the past year is likely SunEdison’s TerraForm, which issued its IPO in July and made its first purchase of $250 million in October when it purchased Capital Dynamics’ U.S. solar portfolio.
Sol-Wind plans to use the $100 million to purchase a portfolio of 184.6 megawatts of solar and wind projects in North America. It will use the returns generated by the wind and solar assets under long-term contracts with utilities to repay shareholders.
“We are a growth-oriented limited partnership formed to own, acquire, invest in and manage operating solar and wind power generation assets,” according to the company’s Form S-1 filing with the SEC. “These assets generate power for retail, municipal, utility and commercial customers under long-term power purchase agreements or similar contracts (PPAs) that generate stable, long-term contracted cash flows. Our objective is to pay a consistent and growing cash distribution to our unitholders on a long-term basis.”
“We are focused on acquiring assets from middle-market developers, which is an area where we see particularly compelling opportunities. We define ‘middle-market developers’ as those developers who typically, in the case of solar assets, develop projects of between 100 kW and 5 MW in nameplate capacity and, in the case of wind assets, between 1 MW and 10 MW in nameplate capacity.”
The company noted that the purchase of the planned portfolio could start as soon as three months from the IPO and could take up to 36 months.
The Sol-Wind offering is the latest news to show that solar is becoming a more mature industry and is engaging financing mechanisms that better match solar power’s ideal returns on investments. MidAmerican Energy Holdings made the first big step when it issued bonds to support its investments in some of the world’s largest solar power plants. Since then companies, including SolarCity have started offer these more stable forms of project funding to investors, which engage investors and the public in a different way than tax-equity funding and are based on lower, longer rates of return than tax-equity funds.Tweet