SunEdison, a solar energy services provider and a subsidiary of MEMC Electronic Materials, announced the sale of a 70 megawatt (MW) photovoltaic (PV) power plant located in Northeast Italy, near the town of Rovigo. When completed in the fourth quarter of 2010, the Rovigo plant is expected to be the largest operating solar power plant in Europe. SunEdison and Banco Santander jointly developed and co-owned the Rovigo plant prior to this sale.
The Rovigo plant was acquired by First Reserve, through the previously announced joint venture established between First Reserve Energy and SunEdison. SunEdison is a minority investor in the joint venture. Investment programs managed by Partners Group AG and Perennius Capital Partners SGR are also expected to co-invest in the project with the First Reserve joint venture.
The total price for the sale is expected to be approximately 276 million Euro. As part of the project acquisition, First Reserve has made an initial payment of 46 million Euro to SunEdison, with the balance to be paid upon interconnection of the plant, which is expected to occur by the end of the fourth quarter of 2010. First Reserve expects to close the long-term project debt financing for the project in the fourth quarter of 2010 and has obtained commitment letters from certain leading project finance banks with respect to the financing. After the sale, SunEdison will manage the ongoing operations and maintenance of the Rovigo plant.
Commenting on the transaction, Carlos Domenech, President of SunEdison, said, "This transaction demonstrates SunEdison's capabilities in developing large-scale solar projects, working with investors to design and implement project finance structures, supporting government agencies in obtaining renewable energy goals and creating green energy jobs."
Mark Florian, Managing Director of First Reserve Energy Infrastructure, commented, "SunEdison is a leader in executing large scale projects like Rovigo and we are proud to add this flagship project to our energy infrastructure portfolio. Rovigo will serve as a worldwide reference for its scale, representing many unique skills embedded in our partnership with SunEdison, including expertise in coordination of complex solar projects, technical management and financial execution."
The Rovigo solar plant is expected to create significant environmental benefits, in addition to the construction and maintenance jobs that benefit the local community. In its first year of operation, the system is expected to generate enough energy to power approximately 16,500 homes and prevent the emission of 40,000 tons of CO2, which would equate to the removal of 8,000 cars from the road.
MEMC intends to provide further details regarding the applicable accounting treatment for the Rovigo sale upon release of its third quarter 2010 earnings results. The recognition of revenue and profit associated with this sale will be determined by the timing of project completion and long-term project debt financing, and the application of the appropriate accounting treatment.