Google Partners to Acquire Solar PV Project Portfolio

Google announced a partnership to acquire a portfolio of solar photovoltaic (PV) plants that serve the California utility known as SMUD (Sacramento Municipal Utility District).

Along with investment firm Kohlberg Kravis Roberts & Co. (KKR) and solar developer Recurrent Energy, the partners will use Google’s equity investment, and a combination of debt and equity to finance the projects.

KKR is also contributing equity from SunTap Energy RE LLC, a new venture it formed to invest in US solar projects.

"The investment is a clear demonstration of solar’s ability to attract private capital from well-established investors like Google and KKR," says Arno Harris, Recurrent Energy CEO. "This transaction provides an example of the direction solar is headed as a viable, mainstream part of our energy economy."

The four solar PV facilities included in the transaction will provide 88 MW of power to SMUD and were the first to be awarded as part of the utility’s feed-in tariff program (FiT) introduced in January 2010.

Construction on three of the Sacramento- area projects will be complete early in 2012, with the fourth coming online later in the year.

Google’s investment in these projects brings its total invested to more than $915 million in renewable energy projects. This is Google’s first investment in utility-scale solar PV.

Recently, Google made its largest investment to date in renewables – $280 million to fund SolarCity’s solar installations. And Google joined with Clean Power Finance to create a $75 million fund that will finance about 3000 homeowners to put solar on their roofs, and committed $280 million to fund residential solar installations. .

SunTap is KKR’s third renewable energy investment in 2011 and its first in the U.S. The company recently invested in Spanish solar firm, T-Solar, French wind developer Sorgenia, and others, adding up to $1.5 billion in invested capital.

To establish SunTap, KKR committed $95 million line of equity, a portion of which will be drawn for this investment. The rest of the equity will be invested in similar projects.

Earlier this week, Recurrent secured a $250 million credit facility from Mizuho Corporate Bank to support construction of 20 solar PV projects across the province of Ontario, Canada.

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