The California Public Employees’ Retirement System (CalPERS) has entered into an agreement to purchase up to a 25% ownership stake in Desert Sunlight Investment Holdings LLC, which owns two solar photovoltaic power generation facilities near Palm Springs, Calif. The facilities began commercial operations in late 2014 with a capacity of 550 MW AC, selling all of their output to California utility companies under long-term contracts.
“Desert Sunlight presents a great opportunity for CalPERS, allowing us to invest both in California and in clean, renewable energy,” explains Ted Eliopoulos, CalPERS’ chief investment officer. “Infrastructure has been one of our best-performing programs and is an important part of the CalPERS portfolio.”
CalPERS will purchase the ownership stake from Sumitomo Corp. of Americas through its Gulf Pacific Power LLC (GPP) account, a partnership between the Pension System and Harbert Management Corp., one of its external infrastructure investment managers. GPP was formed to make equity investments in North American power assets.
The role of CalPERS’ infrastructure program is to hold ownership of essential infrastructure assets that provide predictable returns with moderate long-term inflation protection. Infrastructure also acts as an economic diversifier to equity risk in the portfolio, adds CalPERS.