Solar technology company,
) recently closed a non-recourse debt financing agreement worth
approximately $190 million for the construction of the 72.8
megawatt (MW) Maria Elena solar project in northern Chile.
Construction of the project is expected to get underway in 2014.
Post the announcement, shares of SunEdison closed 1.83% higher in
the last trading session (Friday).
Santiago-based solar development company, Solar Chile has a
portfolio of early-to-mid stage utility-scale photovoltaic power
projects totaling about 1.5 gigawatts or GW in northern Chile,
including the Atacama Desert region. Maria Elena, to be
constructed in Antofagasta, will be the largest PV solar power
plant in Latin America and the first of its kind in Chile. This
move will strengthen the company's position in Chile.
The boards of U.S. Overseas Private Investment Corporation (OPIC),
Inter-American Development Bank (IDB), the Clean Technology Fund
(CTF) and CorpBanca have approved loans of $48.9 million, $50.3
million, $16.0 million and $74.8 million, respectively.
Chile's Atacama Desert absorbs some of the planet's solid
concentration of direct sunlight that makes it a perfect place for
solar power generation. Maria Elena will mark a significant
progress in the Chilean energy landscape. This venture will help in
achieving Chile's plan to boost green energy and help in the
reduction of greenhouse gas releases.
Moreover, we believe that this debt financing agreement will help
in accelerating growth of the company's project portfolio. Also,
this financing would increase the confidence of prospective project
In 2013, SunEdison had entered into an agreement with Chile-based
steel and iron ore supplier CAP S.A. The companies agreed to
jointly work to develop the largest solar photovoltaic power plant
in Latin America. The plant will be located in the Atacama Desert
and have an installed capacity of 100 megawatt (MW).
It is worth noting that SunEdison reported an 11.3% year-over-year
decline in revenues from its semiconductor business in the
last-reported quarter. At the same time, the solar business did
exceptionally well, growing 86.8% year over year.
Though SunEdison's growing exposure to the solar energy market is
encouraging, project development requires considerable time and
investments. Hence, any delay or inability in selling these
projects at desired prices could have an impact on liquidity.
Moreover, SunEdison has a highly leveraged balance sheet. The
company exited the first quarter with cash, cash equivalents and
restricted cash of $526.6 million compared with $643.6 million in
the previous quarter. Long-term debt (excluding current portion)
was $3.49 billion.
Going forward, the pricing environment and competition from
First Solar Inc.
) remain headwinds.
Currently, SunEdison has a Zacks Rank #4 (Sell).
) with a Zacks Rank #2 (Buy) is a better-ranked stock and therefore
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