Google and Kohlberg Kravis Roberts (KKR) have teamed up to invest in a portfolio of solar photovoltaic (PV) projects held by Recurrent Energy.
The portfolio of projects is financed with a combination of debt and equity, which includes a significant equity investment from Google in addition to equity from SunTap Energy RE LLC (SunTap), a new venture formed by KKR to invest in solar projects in the US.
“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, CEO of Recurrent Energy. “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, CA, area projects will be complete early in 2012, with the fourth coming online later in the year. The projects are expected to generate nearly 160,000,000 kWh in their first year of operation, which is roughly equivalent to offsetting the electricity consumption of more than 13,000 average US homes.
Google’s investment in these projects brings its total invested to more than USD915 million in renewable energy projects. The company has invested in a wide range of technologies, from transmission to the world’s largest wind and solar power tower projects. This represents Google’s first investment in the US in utility scale solar PV.
“Google’s commitment to clean energy continues to be a core value for the company,” says Axel Martinez, Assistant Treasurer at Google. “Over the past 18 months, Google has made investments in the sector that not only help deploy hundreds of megawatts of sustainable power, but also enable new and exciting business opportunities. We’re excited to be supporting KKR’s entrance into the renewable energy sector in the U.S. We hope the sector continues to attract new sources of capital.”
“Recurrent Energy is a leading solar developer and Google embodies innovation,” says Raj Agrawal, head of KKR’s North American Infrastructure team. “We couldn’t be more thrilled to partner with these two leaders to serve Sacramento Municipal Utility District (SMUD) with a substantial and reliable new source of renewable energy and to contribute to our country’s vast growth in clean energy resources.”
SunTap is KKR’s third renewable energy investment in 2011 and its first renewable investment in the US Other recent transactions include investments in Sorgenia, a leading French wind park operator and T-Solar, a leading solar energy company in Spain. Over the last year, KKR has made five infrastructure investments, which, with the creation of SunTap, total over $1.5 billion in invested capital.
To establish SunTap, KKR committed USD95 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.
