Mitsubishi’s Diamond Unit Buys Minority Stake in Solar Company

  • Diamond Generating acquiring ‘near majority’ stake in Nexamp
  • Deal marks Diamond’s first foray into the U.S. solar market

Mitsubishi Corp. unit Diamond Generating Corp., the owner of wind and natural-gas fired power plants in the U.S., is acquiring a minority stake in the Boston-based solar developer Nexamp Inc.

The deal marks Diamond’s first step into solar power, Paula Zagrecki, the Los Angeles-based company’s vice president of project finance & distributed energy resources, said in an interview Tuesday.

Diamond plans to invest with Nexamp in community solar projects along with commercial and industrial solar assets, after deciding last year to diversify its power fleet. Community solar and commercial and industrial projects have grown more slowly than the utility-scale and residential solar markets, and have room to expand, she said.

“There’s going to be a lot of consolidation out there,” Zagrecki said. ‘This neglected part of the market -- I think there’s an opportunity.” Terms weren’t provided. CohnReznick Capital Markets Securities LLC advised Diamond on the deal.

Diamond acquired a “near majority” stake, Zaid Ashai, Nexamp’s chief executive officer, said in an interview Tuesday.

Nexamp is “a first-mover in community solar in Massachusetts” with experience in development, operations, procurement and construction, she said.

Diamond owns stakes in 11 operating U.S. power plants and two that are under construction, with a total of 6.5 gigawatts of capacity. It may pursue other solar companies as soon as next year, Zagrecki said.

For Nexamp, Diamond brings relationships with lenders and the ability to monetize the tax credits available for solar power. Wind and solar developers often don’t owe enough in taxes to take advantage of credits generated by renewable energy assets, and instead pursue deals to sell the credits to other companies through tax-equity deals.

“They provide tax-efficient sponsor equity, which allows us to rely significantly less on third-party tax-equity, which tends to slow development,” Ashai said.

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