Canadian Solar acquires solar projects from KKR

Canadian Solar has acquired three operating solar parks with a total capacity of 59.8 megawatts of alternate current (MWac) from private equity firm Kohlberg Kravis Roberts & Co. (KKR) for approximately C$270 million (€184.4 million; $206.2 million), the Ontario-based solar power company said in a statement.

Credit Suisse, which served as sole financial advisor, is providing a $50 million loan in conjunction with the transaction, while the New York branch of Norddeutsche Landesbank and KfW-IPEX Bank are providing term financing.

All three solar parks are located in Ontario’s Sault Ste. Marie. SSM Solar, as the projects are collectively called, represented one of the largest photovoltaic (PV) facilities in North America and the second largest in Canada, when KKR acquired them in February 2013 from energy-focused private equity firm Starwood Energy.

The solar power plants, which went into operation between October 2010 and November 2011, are fully contracted under 20-year power purchase agreements with Ontario Power Authority.

Canadian Solar said it will become both owner and operator of the solar parks, but did not elaborate on whether it would continue a relationship with EDF Renewable Energy, which until now provided operations and maintenance services, The solar power company also did not specify whether Starwood affiliate Nautilus Solar Energy would continue to provide asset management services as it did during KKR’s ownership. Canadian Solar had not responded to a request for comment at press time.

The sale of the three projects comes just a few months since KKR acquired an 80 percent stake in Gestamp Solar, a Madrid-headquartered solar PV developer and operator. The transaction, which valued Gestamp Solar at around $1 billion, was funded by KKR Global Infrastructure Investors II, the firm’s latest infrastructure vehicle it closed on $3.1 billion in July. Fund II, like its predecessor, will make investments in the energy supply chain, water systems, roads, railways, airports and communications networks, focusing on OECD countries.

Asked whether the sale of SSM Solar indicated a broader shift in strategy given KKR's relatively short period of ownership, KKR spokesperson Kristi Huller responded: “This was a specific situation. The Ontario-based owner was a natural fit for this asset.”

Other renewables investments in KKR’s portfolio include a joint venture with Spanish renewables operator Acciona Energia; French wind farm owner/operator Renvico Renewable Energy; Madrid-based T-Solar; and SunTap Energy, a partnership with Recurrent Energy focused on acquiring solar PV facilities in North America.

In addition to infrastructure, KKR also invests in private equity, real estate, credit and hedge funds. As of June 30, its assets under management totalled $101.6 billion.