8point3 Energy Partners Enters Into Agreements to Acquire Interests in 90 Megawatts of Solar Projects
8point3 Energy Partners LP the joint venture formed by SunPower and First Solar , announced recently that it has entered into agreements to acquire an interest in the 50 megawatt (MW) Hooper Project from SunPower and the 40 MW Kingbird Project from First Solar. These drop-down acquisitions are expected to generate approximately $9 million in combined annual pre-tax cash flow and have a 20 year average contract life.
“We’re pleased to announce our second and third drop-down transactions today,” said Chuck Boynton, CEO of 8point3 Energy Partners. “These acquisitions continue our long-term strategy of adding high quality solar projects with investment grade off-takers to our portfolio.”
Hooper and Kingbird Project Details
The 50 MW Hooper Project is located in Colorado’s San Luis Valley and commenced operations in December 2015. Xcel Energy is purchasing the power generated by the Hooper Project under a 20 year power purchase agreement. All conditions have been satisfied and the transaction is expected to close today.
The 40 MW Kingbird Project has been acquired and is located in Kern County, California. Construction of the plant is expected to be completed next month. Following commercial operation, power generated by the Kingbird Project will be sold to member cities of the Southern California Public Power Authority and the City of Pasadena under separate 20 year power purchase agreements.
“These transactions, along with our purchase of the Kern County School District project in January, should enable us to achieve our targeted annual distribution growth rate of 12-15 percent through the end of 2017 without additional project acquisitions,” Boynton added.
ROFO Portfolio Adjustment
With the increased opportunity to potentially acquire solar power plant projects beyond 2016 due to the recent extension of the federal Investment Tax Credit and with the desire to finance acquisitions on favorable terms while simultaneously maintaining a conservative capital structure, the partnership has agreed to make certain adjustments to the ROFO portfolio. These adjustments include (i) waiving the partnership’s right of first offer on a portion of First Solar’s interest in the 300 MW Stateline Project and (ii) adding First Solar’s 179 MW Switch Station Project in Nevada to the ROFO portfolio, which has an expected commercial operation date in 2017. 8point3 Energy Partners now expects to be offered First Solar’s remaining ownership stake in the Stateline Project, approximately 35 percent in the aggregate, at the end of 2016 or the first half of 2017. The partnership believes that these adjustments better align the ROFO portfolio with its targeted long-term growth plan while maintaining its stated targeted annual distribution growth.