With TransCanada’s proposed Keystone XL pipeline under scrutiny and Canada announcing its exit from the Kyoto Protocol, the fossil-fuel-rich country often surprises observers with its commitment to renewable energy investments as well.
On Monday, California-based Recurrent Energy announced that it has secured $250 million in financing for twenty utility-scale solar developments–producing a total of 200 MW of power–in the Canadian province of Ontario. The funds, from Mizuho Corporate Bank, are being transferred as a four-year construction revolver credit facility, one of the largest of its kind in North America.
“This agreement is a significant milestone for our involvement in the North American solar industry, and we are pleased to be partnering with Recurrent Energy, a solar developer with proven experience and expertise,” said Managing Executive Offer and Head of Americans for Mizuho Corporate Bank, Shinya Wako.
Mizuho Corporate Bank initiated the financing, the company said in a statement, underlining the growing importance of renewable energy investments for major international banks.
It also highlights the impact of feed-in tariff programs on renewable energy investments. The local Ontario Power Authority has a strong feed-in tariff program that guarantees long-term contracts for renewable energy sourced power, including solar. That means Recurrent Energy already has a 20-year power purchase agreements in place for all twenty installations.
Because of the tremendous potential economic opportunity, Recurrent has even created a webpage for its Ontario solar developments called: ontariosolarfuture.ca.
“The timing of the announcement reflects the fact we’re getting ready to start construction on the first of the projects as soon as the ground thaws in 2012,” wrote Recurrent Energy CEO Arno Harris in a company blog post.
“The timing is also good news for Recurrent Energy’s business,” he added. “US renewables appear headed for a rough patch with the failure of the Congress to pass critical extensions of the PTC and 1603 Treasury Grant programs before the end of the year.”
Indeed, with regulatory uncertainty in the United States and tax credits set to expire in the coming years, it remains to be seen how international investors will respond and where they will choose to put their cash. For the time being, solar developments in the United States have not slowed in 2011. But, Harris said Recurrent would be preparing for the worst and the Canadian project was part of that diversification safety buffer.
“With several years worth of projects to build in Canada, Recurrent Energy has a solid line of work that is insulated from US policy uncertainties and should help us to ride through the political gridlock here at home,” he wrote.
Photo Caption: Berlin city Mayor Klaus Wowereit (Right) and Toronto Mayor David Miller pose among solar panels on the roof of Berlin’s City Hall (Rotes Rathaus) on the first day of the C40 workshops on climate change on June 10, 2010 in Berlin, Germany.