odyd

Canadian Solar (CSIQ)

6,744 posts in this topic

9 minutes ago, odyd said:

I think they have sold part of the cash flow as well, maybe all

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Yes they are giving up some of the cash flow from the project instead of all as is done when the whole project is sold. Now they only sold the land part of it.

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58 minutes ago, explo said:

My understanding is that the land "user" owned and sold the land and will now pay lease instead thus creating a cash outflow of $73m year 0 and cash inflow from the lease the coming 34 year for the buyer of the land and vice versa for the seller, i.e. cash inflow of $73m year 0 and a in total bigger cash outflow for the lease distributed over 34 years. The seller divests to release cash the buyer does the opposite.

OK, I think I get it now.  Recurrent sells the land to get cash now, then pays a yearly lease.  Hmm.  My guess is the total lease payments will be more than what they got for the land up front (otherwise what's in it for the buyer?), so this points to Recurrent needing cash--maybe a warning sign (they can't meet current obligations), maybe not (they want the cash for further expansion).  And CSIQ owns Recurrent, so it affects them to some degree.

As I said, hmm....

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It certainly shows CSIQ has a way to monetize the assets and create cash. Selling 80% of the project in Brazil, selling now the land and getting Japanese project financing makes a good preparation for low margin module sales. Good price recovery but selling is the method not buying. In the meantime pegi is acting as a dog. Now finding positive in dividend payment at the end of the month

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1 hour ago, solarpete said:

OK, I think I get it now.  Recurrent sells the land to get cash now, then pays a yearly lease.  Hmm.  My guess is the total lease payments will be more than what they got for the land up front (otherwise what's in it for the buyer?), so this points to Recurrent needing cash--maybe a warning sign (they can't meet current obligations), maybe not (they want the cash for further expansion).  And CSIQ owns Recurrent, so it affects them to some degree.

As I said, hmm....

Here is a link on discussions of small scale land lease for solar farms. This is anywhere between $1500 and $3,000 an acre per year. I live in a rural community with landowners having acreage and have received flyers quoting $2,000 per acre for 30 year leases looking for 30+ acres near major distribution centers. Cleared land in my area sells for $10,000-$15,000 per acre.

 

https://www.reddit.com/r/RenewableEnergy/comments/1g9kgq/my_farm_was_approached_by_a_solar_power_company/?st=iu8s0ul0&sh=126f6d5a

 

The purchase price from the earlier link is $18,250 per acre.  A 10% return places the lease at $1825/acre.  The total lease per MW based on 5 acre installation is $9125 per year.  Depending on insolation, which for the areas of project are quite good, this would run about $0.005/Kwhr generated.

 

Selling the land to free up $73M in cash is a good decisions imho.

 

 

 

Edited by SCSolar
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Yes, I've seen references to small-scale farmers leasing their land for solar PV projects in Germany (yes, cloudy Germany!), which is a win-win for the farmers (they can still use the land underneath the panels as long as such use doesn't interfere with the panels' operation, and it provides a long-term, stable and therefore predictable income stream).  So I agree it makes sense for a landowner who currently does NOT use the land for PV purposes to enter into such a lease.  I'm less sanguine about the business case for a company that ALREADY owns and uses the land for PV purposes to sell it, then lease it back.  There it becomes a question of which is greater:  the total cost of the lease (over its entire life) vs. the sale price of the land and any profits that can be generated from the cash proceeds of the sale over that same time span.

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Connor, Clark & Lunn Infrastructure (CCLI) and Samsung Renewable Energy secured C$633m ($482m) in bond financing for Canada’s largest standalone solar plant, the 100MW(ac) Kingston in Ontario, allowing them to refinance their existing bank debt and swap facilities.

The two firms did not reveal further details of the huge bond financing – among the largest ever for a renewables asset in Canada – but said they had attracted support from a “broad base of Canadian and US investors”.

CCLI, part of Toronto-based asset manager Connor, Clark & Lunn Financial Group, has been a regular partner of Samsung at its solar projects in the province.

The Kingston project was commissioned in September 2015, and used substantial amounts of locally-manufactured equipment, per Samsung’s sweeping renewables agreement with the province of Ontario struck in 2010.

Canadian Solar, based in Guelph, Ontario, handled EPC work at Kingston and supplied nearly half a million of its locally made 72-cell MaxPower modules.

Meanwhile, Germany’s SMA supplied 125 of its Sunny Central 800CP-US central inverters made at its factory near Toronto, and will stay on to maintain the project for the next decade.

Through its controversial deal with Ontario – revised in 2013 – Samsung Renewable Energy has been responsible for many of the largest wind and solar projects in the province, including the Grand River project, which combines 150MW of wind and 100MW of solar.

Samsung has said it is now contemplating investments in western Canada.

I mentioned before that CSIQ hired a VP for WC. I see no activity in Alberta yet, but with Samsung coming on line, and Suncor already teaming up with CSIQ, Canadian seems to set itself for more work in the country. 

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following up on the land sale a bit more details

Highlights of the transaction:

  • The land acquired by the Partnership consists of six renewable power generation tenant sites within four utility-scale solar PV projects developed by Recurrent Energy; and
  • The portfolio features (i) an average remaining lease term of approximately 34 years (including renewal options); and (ii) rental income derived from utility-scale solar PV projects holding long-term power purchase agreements (“PPAs”) with tenures of 15 to 20 years from high-quality utility off-takers including Pacific Gas & Electric (“PG&E”) and Southern California Edison (“SCE”).
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Based on the Brazil deal and land sale I can see CSIQ adding $260M in revenue including the China's plant sale to Q4. Q4 could be close to $1B in sales, thy would get their revenue figures based what is expected for Q3.

So, on revenue they are matching, only GM is a guess, of course 2017 i a big unknown. 

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I read that SUNEQ is filing for bankruptcy in Canada and since Canadian is buying projects they may be trying to buy them from SUNEQ in the future.

there is a press read link to Globe and Mail

http://www.pressreader.com/canada/the-globe-and-mail-ottawaquebec-edition/20161029/281840053217552

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