Canadian Solar Inc. is the latest renewable energy company that is planning to set up a Yieldco which typically provides power under long-term contracts and pays out a portion of its cash flow to shareholders.
“We have been reviewing various options to structure and potentially list our downstream business, and we are now planning to form a YieldCo vehicle, in order to maximize value creation for our shareholders over the long-term,” said Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar. “We expect that a YieldCo vehicle and its subsequent listing would enable us to capture the value inherent in our large pipeline of long-term contracted assets and to recycle capital.
“We are engaged in the process of analyzing the optimal structure for a YieldCo, including the optimal asset profile. We expect to complete the sale of those Canadian projects for which we have an identified end-buyer. We may, however retain other projects that we have developed for eventual inclusion in the asset base of a YieldCo structure or add additional assets from third parties. We plan to update the market as the process evolves.”
Recently, it emerged that First Solar Inc. and SunPower Corp. are planning to establish a joint Yieldco in which both companies each expect to contribute a portfolio of selected solar generation assets from their existing portfolio of assets. They expect to