The AES Corporation and Riverstone Holdings LLC announced on March 25 that they have committed up to $1 billion as part of a new joint venture to develop a global platform of utility-scale solar photovoltaic (PV) projects. Under terms of the agreement, AES, one of the world’s largest global power companies, and Riverstone, a New York-based energy and power-focused private equity firm, will each provide up to $500 million of capital over five years to invest in PV solar projects around the world.

 

The jointly owned entity, to be called AES Solar, will seek to become a leading global developer, owner and operator of utility-scale solar installations that will be connected to the power grids that supply homes and businesses. These installations, ranging from fewer than two to more than 50 megawatts in size, will consist of land-based solar PV panels that capture sunlight and convert it into electricity, feeding the power grid directly.

 

The business will follow the traditional independent power producer and wind business growth models by initially focusing on developments and projects in those countries offering the most attractive tariffs. As the costs of both PV panels and installation come down, AES Solar will look to expand into other countries with appropriate market incentives, with the goal of “grid parity” – being competitive with conventional fuels.

 

“Renewable energy is an increasingly significant part of AES’s overall portfolio and currently accounts for 20 percent of our global generation capacity,” said Paul Hanrahan, AES president and chief executive officer. “Solar is a natural extension of our business, much as wind generation has been, and we see tremendous opportunity for growth in this market. We look forward to partnering with Riverstone in this joint venture, to make solar power a viable energy source worldwide.”

 

Ralph Alexander, a managing director of Riverstone Holdings, said, “Because of its scale, this joint venture has the potential to change the fundamental economics of solar power. We are excited about partnering with AES, which we recognize as a world-class partner. The timing is right for this project given the spread of renewable power standards around the world, high energy prices and the continued progress of the solar photovoltaics industry to improve performance and reduce costs. Together, these trends present a substantial opportunity to create value and meet the world’s growing demand for clean energy.”

 

The joint venture will be managed by a seven-member board of directors. Three directors each will be appointed by AES and Riverstone. Robert Hemphill will serve as president and CEO and the seventh member of the board. Mr. Hemphill joined AES in 1981 and has held a series of senior leadership positions, including serving as AES's executive vice president of Global Development. He also served as a member of the AES Board of Directors for seven years.

 

About AES

AES is one of the world’s largest global power companies, with 2007 revenues of $13.6 billion. With operations in 28 countries on five continents, AES’s generation and distribution facilities have the capacity to serve 100 million people worldwide. The company’s 13 regulated utilities amass annual sales of over 78,000 GWh and our 121 generation facilities have the capacity to generate approximately 43,000 megawatts. AES’s global workforce of 28,000 people is committed to operational excellence and meeting the world’s growing power needs. To learn more about AES, please visit www.aes.com or contact AES media relations at media@aes.com.

 

About Riverstone Holdings LLC

Riverstone Holdings LLC is a New York-based energy and power focused private equity firm founded in 2000. Riverstone conducts buyout and growth capital investments in the midstream, upstream, power, oilfield services, and renewable sectors of the energy industry. To date, the firm has committed more than $8 billion to 47 investments across these five sectors, representing companies with nearly $70 billion of assets. For more information, visit www.riverstonellc.com.