Recurrent Energy (a subsidiary of Canadian Solar) – a global developer and owner of solar and energy storage assets – announced that it has secured a $500 million preferred equity investment commitment, convertible into common equity, from BlackRock through a fund managed by its Climate Infrastructure business.
The $500 million investment will represent 20% of the outstanding fully diluted shares of Recurrent Energy on an as-converted basis. Canadian Solar will continue to own the remaining majority shares of Recurrent Energy after the closing of the investment.
This investment will provide Recurrent Energy with additional capital to grow its high-value project development pipeline while executing its strategy to transition from a pure developer to a developer plus long-term owner and operator in select markets, including the U.S. and Europe. And this transition is expected to create a more diversified portfolio and provide more stable long-term revenue in low-risk currencies, and enable Recurrent Energy to create and retain more excellent value in its project development pipeline.
Recurrent Energy is one of the world’s largest and most geographically diversified utility-scale solar and energy storage project development platforms, with a strong track record of responsibly originating, developing, financing, and building around 9 GWp of solar and 3 GWh of battery storage power plants across six continents since 2009. As of September 30, 2023, Recurrent Energy had a global development pipeline of 26 GW in solar and 55 GWh in storage, of which 13 GW and 12 GWh, respectively, are projects with interconnections.
Recurrent Energy expects to have 4 GW of solar and 2 GWh of storage in operation in the U.S. and Europe by 2026. And the perimeter of the deal includes the U.S., Canada, Spain, Italy, the U.K., France, the Netherlands, Germany, South Africa, Brazil, Chile, Colombia, Australia, South Korea and Taiwan and excludes Canadian Solar’s project development business in Japan and China, and certain assets in Latin America and Taiwan. The closing of the deal is subject to regulatory approvals and certain terms and conditions in accordance with the transaction agreements.
Solar energy is the most affordable way to produce electricity in most places worldwide. And between 2022 and 2027, global solar capacity is projected to almost triple, becoming the largest source of power capacity in the world, according to the International Energy Agency. The growth of renewable energy (especially in the U.S. and Europe) is also driving demand for energy storage which provides dispatchable and reliable power to the grid. Wood Mackenzie also projects global cumulative deployments of energy storage to exceed 1,000 GWh between now and 2030.
BofA Securities and Banco Santander, S.A. acted as financial advisors to Canadian Solar.
KEY QUOTES:
“We started our global energy development business in 2009 and have since strategically grown Recurrent Energy as Canadian Solar’s premier renewable energy platform, forging a new path in developing, financing and constructing first-of-their kind solar and energy storage projects. We are now at an inflection point for renewable energy growth. The infusion of capital from our partner BlackRock, who is also Canadian Solar’s largest institutional investor, will provide the resources needed to further scale the Recurrent Energy platform and meet record clean energy power demand across the world.”
– Dr. Shawn Qu, Chairman and CEO, Canadian Solar
“We are delighted to have the support of BlackRock, one of the largest and most sophisticated renewable energy investors in the world, as we scale Recurrent Energy in response to massive global demand for renewable energy and energy storage solutions. This investment will support our growth and continued ambition to make a difference by leading the renewable energy transition across the world. Our mission is to deliver clean, reliable and affordable power to the world, today and tomorrow, and this milestone will help us continue to achieve this goal.”
– Ismael Guerrero, CEO of Recurrent Energy
“We are excited to partner on behalf of our clients with Recurrent Energy. We believe this partnership will help unlock the full potential of Recurrent Energy’s impressive renewable energy project development platform. Recurrent Energy is emblematic of our strategy of investing in leading renewable power generation assets and transition-enabling infrastructure, and we are pleased to make this first investment commitment from the fourth vintage of BlackRock’s Climate Infrastructure fund franchise.”
– David Giordano, Global Head of Climate Infrastructure and Chief Investment Officer of Transition Capital, BlackRock
