Banco Santander is seeking regulatory approval to indirectly sell part of its stake in a large Concentrated Solar Power (CSP) project in Nevada to two big Canadian pension funds.
Banco Santander is seeking regulatory approval to indirectly sell part of its stake in a large Concentrated Solar Power (CSP) project in Nevada to two big Canadian pension funds, according to a filing with Federal Energy Regulatory Commission.
The plan calls for the Spanish bank to transfer its 26.8% stake in Tonopah Solar Energy LLC to a new joint venture which would hold its alternative energy assets in the U.S.
The filing says two Canadian pension funds, Ontario Teachers' Pension Plan and Public Sector Pension Investment Board, would each acquire a stake in the venture. Financial terms weren't disclosed, but Santander and the funds would each own about a third of the joint venture, according to the filing.
The pension funds' interest comes as they and their peers increasingly target electric utilities, toll roads and other infrastructure assets for investment, drawn by the steady income the assets generate, which matches up well with their long-term liabilities.
Caisse de Depot et placement du Quebec acquired a stake in the London Array 1 offshore wind farm for $1.06 billion in January, while Ontario Municipal Employees Retirement System bought a stake in Ontario's Bruce Power nuclear plant for 450 million Canadian dollars ($400 million). That same month, Canada Pension Plan Investment Board acquired a 10.4% stake in a large Peruvian natural gas pipeline operator.
In joining with Santander, the two Canadian pension funds would gain exposure to the $1 billion Crescent Dunes solar-energy project in Nye County, Nevada, while Santander would reduce its financial risk by taking on its new partners.
FERC approval is required for the deal to proceed.
SolarReserve LLC, a closely held developer of solar-power technology based in Santa Monica, is the majority owner of Crescent Dunes. Besides Santander, an arm of Spanish construction company ACS Group holds a minority stake in the project.
Crescent Dunes is expected to start generating electricity by the end of this year and produce enough solar energy to power 75,000 homes annually during peak electricity periods, according to SolarReserve's website. The energy will be sold to Nevada Power Co. under a long-term purchase contract.
The joint venture company would also hold Santander's renewable solar and wind power assets in California and Nebraska, according to the FERC filing.
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