Hong Kong: Sky Solar Holdings, Ltd., a global developer, owner and operator of solar parks, and Hudson Clean Energy Partners, a private equity firm specializing in renewable energy, announced a new strategic partnership September 21 to fund solar projects in Latin America and Japan with a total capital commitment from Hudson of up to $100 million. The two parties have also agreed to collaborate on an expansion into the U.S. solar market.
As part of their partnership, Hudson will invest $50 million in the construction of approximately 128 megawatts of solar projects in Chile and Uruguay, and will receive a 49 percent minority equity stake in the projects upon their completion. Hudson has allocated an additional $50 million for secondary market opportunities in Japan, subject to due diligence and other necessary approvals.
Beyond the capital commitment, both parties have agreed in principle to collaborate on identifying and acquiring suitable renewable assets in the United States.
“We are delighted to be working with a leading specialized private equity and infrastructure fund to develop shovel-ready projects in our key markets,” said Sanjay Shrestha, chief investment officer of Sky Solar and president of Sky Capital Americas. “In addition to the near-term capital investment, we believe Sky Solar will benefit from Hudson’s long tenure as an investor in the renewable energy sector and unmatched industry experience in this strategic partnership.”
“We are excited about our partnership with Sky Solar, a company with deep power development expertise and substantial global reach,” said Neil Z. Auerbach, founder and managing partner of Hudson. “They have developed a portfolio of high-quality solar projects in attractive markets such as Chile, Uruguay and Japan.”
Earlier, on August 4, Hudson announced a joint partnership with United Arab Emirates-based Adenium Energy Capital. As part of the transaction, Hudson has committed to invest long-term equity in Adenium’s utility-scale solar PV pipeline in Japan to fund the construction of approximately US$300 million in assets. The first 20 megawatt project secured local project financing and was commissioned in May 2015.
Adenium and Hudson formed the partnership to jointly capture what they call the “compelling” investment opportunity presented by utility-scale solar photovoltaic projects in Japan. Adenium will continue to develop its growing solar pipeline of over 75 MW, and the partnership will be used to fund the construction and long-term ownership of those projects.
“It can be hard to break into that market unless you have a good local partner,” said Ben Baker, a senior associate at Hudson, in a phone interview. “Both Adenium and Sky Solar have employees on the ground, it’s important to find a partner where that’s the case. But once you do, Japan is very welcoming to foreign investment. The project finance market is slowly opening up to foreign sponsors. We had good luck with Japanese banks, and they certainly want to lend to development in their own country.”
Hudson Clean Energy is a private equity and infrastructure firm dedicated exclusively to investing in renewable power and clean energy.