Canadian Solar Inc. CSIQ announced that its wholly owned subsidiary, Recurrent Energy, has signed a partnership agreement to sell its 51% controlling interest in the California-based 200-megawatt (“MW’) Garland solar photovoltaic (“PV”) project to Southern Power, a subsidiary of Southern Company SO. Canadian Solar will retain a 49% stake in the project.
The Garland solar project will begin commercial operations at 2016-end. The plant is expected to create over 300 construction jobs and generate sufficient energy to power over 45,000 homes in the state on completion. Electricity and associated renewable energy credits generated from the plant will be sold to Southern California Edison (SCE), a subsidiary of Edison International EIX, under long-term power purchase agreements.
Recurrent Energy has secured construction and term debt financing for the project from five banks – Rabobank, Santander, CIT, KeyBank and NORD/LB. NORD/LB will serve as the Coordinating Lead Arranger. These banks will provide project-level construction debt, LC facilities and a back-leveraged term facility, valued at a total of about $480 million.
Canadian Solar’s high-performance CS6X-P photovoltaic solar modules mounted on single-axis tracking tables were utilized for the construction of the Garland plant. It is located on a 2,000-acre land in Kern County. Signal Energy Constructors is responsible for engineering, procurement and construction services for the project.
According to Canadian Solar, the Garland project is a step toward the Recurrent Energy-Southern Power partnership’s target of connecting over 1.2 gigawatts of solar power to the grid across the state by 2016-end.
The latest agreement marks the third partnership between Recurrent Energy and Southern Power. In Nov 2015, Recurrent Energy sold approximately 51% interest in the 157.5-MW Roserock solar generation plant to Southern Power. Recurrent Energy retained the remaining stake in the project. Earlier in Sep 2015, Recurrent Energy sold approximately 51% interest in the 200-MW Tranquillity solar generation plant to Southern Power. Recurrent Energy retained the remaining stake in the project.
Canadian Solar caters to a geographically diverse customer base spread across key markets. The company also has a strong pipeline of projects, and with the acquisition of Recurrent Energy, it further expanded its total project pipeline. The acquisition is expected to significantly expand the scale of the company’s solar energy development platform, making it one of the foremost solar energy developers in the world.
Zacks Rank
Canadian Solar currently has a Zacks Rank #2 (Buy). JA Solar Holdings Co., Ltd. JASO is another favorably placed stock in the solar industry sporting a Zacks Rank #1 (Strong Buy).
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