US Solar Fund agrees up to 50% stake buy in Mount Signal 2 plant

US Solar Fund Plc (LON:USF) has signed a deal to buy up to a 50% stake in the 200-MW Mount Signal 2 (MS2) photovoltaic power plant in the Imperial Valley of Southern California.

The London-listed fund will pay between USD 44 million (EUR 35.8m) and USD 46 million for the purchase from Australian solar farms investor and operator New Energy Solar Ltd (ASX:NEW). Initially USF will buy a 25% interest in the asset for a fixed price of USD 23 million and will get the option to acquire a further 25% up to 12 months later for around USD 21 million-23 million, depending on performance. The initial transaction is seen closing in the first quarter of 2021.

The Mount Signal 2 facility has a 20-year power purchase agreement (PPA) with Southern California Edison (SCE) for 100% of its output. The contract became effective in June 2020.

“MS2’s long term, investment-grade, escalating-price PPA brings USF’s weighted average remaining PPA term to almost 16 years and provides further diversification in terms of geography, project and PPA offtaker to the portfolio,” said Gill Nott, chairman of US Solar Fund.

This is the fund’s sixth binding acquisition deal and with it USF has committed 100% of its IPO proceeds. When the initial transaction is finalised, its total portfolio will amount to 493 MW in direct current (DC).

The plant’s current owner announced in September that it was launching a process to review all opportunities for its portfolio, including MS2. NEW acquired the then shovel-ready asset in 2019.

Both USF and NEW are managed by the same company -- New Energy Solar Manager.

(USD 1.0 = EUR 0.814)

Choose your newsletter by Renewables Now. Join for free!