MMA lands Texan solar mega-deal

MMA Renewable Ventures has landed a deal for the largest solar photovoltaic (PV)project in the US, three days after selling its solar portfolio to a Spanish solar provider.

The firm's Gemini Solar Development Company - a joint venture between MMA Renewable Ventures and solar panel manufacturer Suntech Power Holdings - will build and operate a 320-acre, 30MW project for the City of Austin, Texas.

The City of Austin's publicly-owned electric utility, Austin Energy, has committed to buy the energy - enough to power roughly 5,000 homes - under a 25-year power purchase agreement, at a price of $10m per year.

The Austin project significantly increases MMA Renewable Ventures' solar portfolio less than a week after it agreed to sell its Spanish solar portfolio to solar provider Fotowatio, including its future pipeline of potential transactions. The firm, which completed a third solar fund at $200m at the end of January, says on its web site that it operates more than 24.8Mwp of solar power across the US. However, recent statements put the figure at over 40Mw.

The project is more than double the power produced by MMA's largest existing project at Nellis Air Force base. "Nellis has a 14Mw site, and this project will look exactly like that, only twice as big," said Austin Energy spokesman Ed Clark. He added that the project will take Austin Energy's renewable energy portfolio from 12 per cent of its total power to 13 per cent.

The City of Austin has a stated goal of generating 100MW of solar capacity by 2020, representing 30 per cent of its portfolio. The plant, scheduled to go online next year, will be generating some electricity 23 per cent of the time, said Clark.

However, despite MMA's expansion plans, concerns remain about the long term future of its parent company Municipal Mortgage and Equities (Munimae), which purchased the business for $3m in 2006, along with a contingent payment of $12m based on performance targets.

In February, Munimae restated its 2004 and 2005 accounts, and in a report filed last month its auditors expressed "substantial doubt about the Company's ability to continue as a going concern". Munimae had defaulted on $455m of its $2bn debt as of Sept 30.

MMA Renewable Ventures also lost $465,000 in 2006, the last year for which accounts have been provided.