Electricity utility AES and energy-focused private equity firm Riverstone Holdings have committed up to $1 billion as part of a new joint venture to develop a global platform of utility-scale solar projects.

Under terms of the agreement, AES and Riverstone, will each provide up to $500 million of capital over five years to invest in photovoltaic (PV) projects around the world.

The jointly owned entity, AES Solar, will seek to become a 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 2MW to more than 50MW in size, will consist of land-based solar PV panels that feed electricity to the power grid directly.

AES noted that 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 reportedly look to expand into other countries with appropriate market incentives, with the goal of being competitive with conventional fuels.