SunEdison, Goldman Agree to Form $1 Billion Clean-Power Fund

Posted by on Tue, Aug 18, 2015 @ 11:08 AM

The world’s biggest renewable-energy developer is forming an investment vehicle with a Goldman Sachs Group Inc.-managed fund, according to a statement Monday. SunEdison shares surged after the close of regular trading in New York.

The Goldman-managed fund, West Street Infrastructure Partners III, will provide $300 million in equity and a group of banks that includes Bank of America Corp. and Deutsche Bank AG will supply $700 million in debt.

The deal will accelerate the developer’s global expansion effort, according to SunEdison Chief Financial Officer Brian Wuebbels. It adds to an existing $1.5 billion warehouse lending fund, and a separate $500 million fund for TerraForm Power Inc., the SunEdison-controlled company that buys and operates power plants.

The new fund will help SunEdison meet its 2016 growth guidance and provide “repeatable and scalable funding for the future,” Wuebbels said in the statement.

The WSIP Warehouse fund is expected to be formed by the end of October. SunEdison can expand it by another $1 billion under certain conditions.

The fund “gives the company more flexibility with its liquidity and the capital needed to develop the projects for their 2016 guidance,” Jeff Osborne, an analyst at Cowen & Co. in New York, said in an e-mailed response to questions.

TerraForm will have the right to purchase the power plants that are developed through the new fund.

The fund will help Goldman Sachs “expand our portfolio of investments in solar and wind projects,” Edward Pallesen, head of the company’s infrastructure investment group, said in the statement.

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