International Finance Corporation (IFC) is looking to invest $55 million to pick 15 per cent equity stake in an upcoming solar power development company which is sponsored by US-based SunEdison LLC. It has a pipeline of grid-tied solar PV projects in India and Thailand, with plans for expansion across South and South-East Asia, besides sub-Saharan Africa. The deal will value the firm at around $366 million.
IFC may also provide debt – $20 million for the Indian project and $26 million for the four small Thai projects. The expected total project cost will be approximately in the range of $300-$450 million for the five grid-tied projects being debt-financed by IFC.
In addition, IFC is also considering supporting these projects with financing from the IFC Earth Fund, a platform of the GEF Earth Fund, and the Clean Technology Fund (a fund under the World Bank-administered Climate Investment Funds) for the Thai projects, it has disclosed.
In India, the Alpha project 25 MW facility will be housed in the newly announced Gujarat Solar Park (being built by Gujarat Power Corporation Ltd), located near the Charanka village in Santalpur Taluka, Patan district. The four Thai projects are for a combined capacity of 26 MW across three locations.
IFC expects the deal to bring a demonstration effect of early non-recourse financing of solar PV in India, Thailand and other regional markets.
The proposed firm sponsored by SunEdison LLC (North America’s largest solar energy services provider), will be based in Singapore with operational teams in Chennai, Bangkok and elsewhere. All its projects will be built by SunEdison’s EPC company and later, operations and maintenance will be provided by SunEdison O&M Services arm.
Founded in 2003, SunEdison LLC became a market leader in commercial scale roof-top PV installation under various state-level solar regulatory support systems. It was bought by NYSE-listed water technologies firm MEMC in November 20, 2009, for approximately $340 million. It is now one of the leading solar power services companies in North America with global operations and has over 600 employees worldwide.
As of March 31, 2011, SunEdison has interconnected over 425 solar PV systems representing 287 MW of solar PV capacity and has approximately 1.9 GW of projects in its pipeline.
Solar energy is fast becoming a ‘sunrise’ sector in India. It has started attracting interest from financial investors, as well as cross-border partnerships.
Last year, Gurgaon-based SunBorne Energy, a specialist in utility-scale solar solutions, entered into an agreement with Chinese solar panel maker Suntech Power Holdings Co., where Suntech will supply SunBorne Energy with 100 MW of solar modules over the next two years. Suntech will provide 280 WP polycrystalline silicon modules for projects which will be designed, installed and commissioned by SunBorne Energy. The agreement includes an initial order for 10 MW of solar panels for a project in the state of Gujarat.
SunBorne Energy LLC was set up in 2008 by a team of professionals, with the backing of General Catalyst Partners and Khosla Ventures, to develop and operate solar power projects in India, mainly using solar thermal or CSP technology. Incidentally, IFC invested around $10 million in the solar power producer through a mix of debt and equity.
IFC has also put money in three other solar power-related firms in India in the past two years including NDPL Solar, Applied Solar and Azure Power. These three investments add up to around $46 million together in debt, equity and quasi-equity forms.
Among others, the diversified Yash Birla Group is likely to sign a joint venture agreement with a US-based company to set up and maintain solar power plants in India.