Lightsource bp hires CIBC to sell 2 GW of late-stage US-based solar projects
Lightsource bp has engaged CIBC to sell equity stakes in more than 2 GW portfolio of its US-based solar projects, said two sources familiar with the situation.
The process has not formally launched yet.
Lightsource bp significantly increased its US development pipeline following a June acquisition of projects from 7x Energy. The ongoing sales process is being viewed as asset recycling as the developer looks to use the resulting proceeds to build out its next generation of projects, combined with the new USD 1.8bn revolving credit facility it secured globally earlier this month.
The portfolio being offered by CIBC includes 1 GW of solar projects slated to go COD by the end of this year, alongside 1.2 GW worth of projects scheduled for next year. The process will be staggered so each project is sold at COD, not before. This will completely de-risk the assets that are currently on the block, according to the sources.
"As part of our long-term investment strategy, Lightsource bp typically brings in additional co-investors into our portfolio of solar assets, while continuing to maintain management control along with a significant ownership stake. Management control includes asset management, client and lender interface, and operations and maintenance (O&M) activities," said a Lightsource bp spokesperson in an emailed statement to NPM.
CIBC declined comment on the situation.
According to NPM data and project-level data on Lightsource bp’s website, the company has at least nine projects either under construction or under development with PPA’s already announced at the 300 MW Bighorn project in Colorado, 163 MW Elm Branch project in Texas, the 190 MW Bellflower project in Indiana and the 100 MW Elk Hill project in Pennsylvania.
This capital raise is likely to attract a universe of investors interested in slightly lower returns given the diminished risk profile of the projects.
The sale process also happens alongside moves by other developers with a significant percentage of their pipeline at pre-construction, including Apex Clean Energy and Origis Energy, feeding into an ever-widening crowd of funds with a bigger risk-return profile and healthy appetite for ESG-oriented investments, said a third source.
As reported, Lightsource bp increased its US project pipeline in June after bp reached a deal to acquire 9 GW of solar development projects from 7X Energy for USD 220m. The assets are expected to be developed through Lightsource bp.
Assets in this portfolio, with a combined generating capacity of 2.2 GW are expected to reach final investment decision (FID) by 2025 with the remaining progressing by 2030.