Canada’s Brookfield Asset Management has signed an agreement to increase its stake to 51% in TerraForm Power and to completely acquire Terraform Global.

TerraForm Global and TerraForm Power, which have a combined 3.9GW of renewable energy assets, are the yieldcos of bankrupt renewables firm SunEdison.

Brookfield will acquire 100% shares of the TerraForm Global for $787m and will also assume about $455m in debt, which takes the total value of the deal to $1.3bn.

TerraForm Global owns, operates or  has contracts to acquire wind and solar power plantstotalling 952MW. The plants are located  Brazil, China, India, South Africa, Thailand, Malaysia and Uruguay.

Brookfield will also acquire a controlling stake in TerraForm Power and is also expected to become its sponsor.

The sponsorship is expected to result in positioning TerraForm Power as a major wind and solar energy company focused on North America and Western Europe.

For the stake acquisition, Brookfield will be paying $11.46 per share of TerraForm Power. The Canadian asset management company will also sponsor $500m for equity line to support TerraForm’s growth in the future.

Subject to regulatory approvals, the transactions are expected to close in the second half of this year.

TerraForm Power chairman and Interim CEO Peter Blackmore said: “With the successful completion of the Board’s strategic alternatives process, the TerraForm Power Board and management team are confident that Brookfield’s sponsorship will enable our company to deliver cash to shareholders while strengthening our operations for future value creation.

“This agreement with Brookfield is the culmination of our efforts to separate our operations from SunEdison and to position TerraForm Power for future success.

"With the support of Brookfield as TerraForm Power’s sponsor, we will gain additional resources to continue to expand our portfolio and increase cash flow on a per share basis. We look forward to working with the talented Brookfield team to achieve a smooth transition.”

Brookfield senior managing partner Sachin Shah said: “We are pleased to increase our significant investment in TerraForm Power and to contribute our operating expertise in the sector to position the company for growth.

“We are confident that our significant renewable power operating experience, financial resources and global institutional relationships will provide TerraForm Power with strong financial flexibility and an attractive pipeline for growth moving forward.”

Image: Brookfield Asset Management to acquire SunEdison’s yieldcos. Photo: Courtesy of start08/