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Riverstone invests in $1bn solar joint venture

The energy focussed-private equity firm will join AES in an attempt to ‘change the fundamental economics of solar power’.

Riverstone Holdings, a New York-based energy- and power-focussed private equity firm, has joined power company AES in launching $1 billion (€648 million) joint venture AES Solar to develop, own and operate utility-scale solar installations.

Riverstone and AES will contribute $500 million each over five years. The venture aims “to make solar power a viable energy source worldwide”, according to AES president and chief executive Paul Hanrahan.

AES Solar will initially direct its efforts towards countries offering the most attractive tariffs and will expand into other countries with “appropriate market incentives” as the cost of solar panels and installation declines.

“Because of its scale, this joint venture has the potential to change the fundamental economics of solar power,” said Riverstone managing director Ralph Alexander. “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 photovolaics industry to improve performance and reduce costs.”

Riverstone has committed more than $8 billion to 47 investments since its founding in 2000. Buyout and growth capital investments are made in the midstream, upstream, power, oilfield services and renewable sectors of the energy industry.

The firm is currently raising its fourth Carlyle/Riverstone Global Energy and Power fund targeting $6 billion, according to the Probitas Partners 2008 Private Equity Deskbook. The third fund closed on $3.8 billion in 2006. The firm also closed the first Carlyle/Riverstone Renewable Energy Infrastructure Fund in 2006 on $685 million.

Previous alternative energy investments by Riverstone have included bioethanol producer The Ensus Group and biodiesel producer Green Earth Fuels.