Fundraising

Lehman buys stake in wind energy company

With a fresh $3.3 billion fund at its disposal, the private equity arm of Lehman Brothers has completed its acquisition of SkyPower, a Canadian solar and wind energy developer.

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SkyPower, a leading Canadian renewable energy company that has a substantial portfolio of solar and wind energy projects across the country, has sold a “significant equity stake” to Lehman Brothers’ private equity business.

The deal, details of which were not disclosed, includes an up-front payment as well as commitments to future renewable energy projects and investments. SkyPower’s current management, including Kerry Adler, the founder and CEO, will continue to oversee operations at the company.

“We will be better positioned to capture increased opportunities as part of our mandate and commitment to help Canada become a global environmental leader by developing our vast natural renewable power resources and generating clean, green renewable power,” Adler said in a statement.

SkyPower currently holds interests in over 50 wind and solar projects in Canada. Most recently, in mid-May SkyPower was awarded a contract by the Ontario Power Authority to complete a solar park, in a joint venture with SunEdison Canada LLC, in Ontario’s Norfolk County. The 9.12 megawatts of power generated annually from the completed project will be made available through local utility Norfolk Power.

“Our investment in SkyPower demonstrates the necessary linkage between sound financial decisions and a better environment,” Theodore Roosevelt IV, chairman of Lehman Brothers’ Council on Climate Change, said in a statement. Lehman Brothers recently announced the closing of its fourth private equity fund, Lehman Brothers Merchant Banking Partners IV, with total commitments of $3.3 billion.

In recent years the energy sector has been an increasingly popular investment arena. According to a May 2007 report issued by E2 and the Cleantech Venture Network, in North America in 2006, over $2.1 billion of venture capital went toward energy generation, storage, and distribution – nearly a three-fold increase over 2005.

The report attributes much of this growth to rising energy prices and broader public awareness of global warming.