Summary
At an early 2015 investor conference, SunEdison’s(SUNEQ.PK) then-chief financial officer, Brian Wuebbels, trumpeted the profit potential in the solar developer’s relationship with a venture it had recently spun off.
SunEdison had established TerraForm Power Inc (TERP.O) as a “yieldco,” a complex financing vehicle to purchase energy projects from SunEdison and other developers. TerraForm lured investors with the promise of reliable dividends based on long-term power contracts.
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“You are combining a relatively new energy sector with a brand new investment vehicle,” Dan Reicher, executive director of Center for Energy Policy and Finance at Stanford University. “We shouldn’t be terribly surprised that we’ve had some problems.”
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