By Ben Dummett
Banco Santander S.A. is seeking regulatory approval to
indirectly sell part of its stake in a large solar-energy 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.
Representatives for the two funds couldn't immediately be
reached for comment. A spokesman for Santander had no immediate
comment.
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.
Write to Ben Dummett at ben.dummett@wsj.com
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