Buffett Energy Unit Weighs Debt Sale for Solar Farm
MidAmerican Energy Holdings Co., the power producer at Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), said it’s weighing whether to sell more bonds in 2013 to finance a $2.4 billion solar venture in California.
The issuance is being considered for the first half of next year at Topaz Solar Farms LLC, the MidAmerican unit of Omaha, Nebraska-based Berkshire said today in a regulatory filing. In February, Topaz issued $850 million in 5.75 percent bonds due in September 2039 to help fund the 550-megawatt project.
MidAmerican, led by Chief Executive Officer Greg Abel, has been expanding bets in renewable energy while adding to investments in natural gas. The firm created a unit in January to support wind, geothermal, solar and hydroelectric projects and may be betting that now is an advantageous time to borrow, said Joseph Salvatore, an energy analyst with Bloomberg New Energy Finance, in a phone interview.
There “seems to be a fairly decent appetite” for the debt, Salvatore said. “Rates are fairly low right now, and maybe they’re thinking that in two to three years, if the economic recovery speeds up, interest costs will be higher.”
MidAmerican agreed in December to buy Topaz from Tempe, Arizona-based First Solar Inc., which is supplying the solar panels. MidAmerican said in a February regulatory filing that Topaz planned to issue about $430 million of additional notes to fund construction costs.
Construction is proceeding ahead of schedule with delivery of the first substation transformer expected in the middle of this month, MidAmerican said of the Topaz project in the filing.
The Berkshire energy subsidiary said the 2013 financing plan also includes $300 million to $400 million of bond issuance for the PacifiCorp utility, and as much as $600 million to pay debt owed to a turbine supplier.
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