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John Hancock takes $227M equity stake in SolarCity project portfolio

SolarCityCorp. said May 3 John Hancock Financial has taken a $227 millionequity stake in a 201-MW portfolio of diversified solar projects in return fora majority of the projects' cash flow over a 20-year term.

SolarCity retains ownership and a minority share of annualcash flow during the contract, and will assume 99% of post-contract cash flows.The investment, according to the developer, raised $3 of financing per watt forSolarCity, including tax equity, upfront rebates and prepayment.

"Cash equity enables SolarCity to monetize a highpercentage of cash flows to maximize upfront financing proceeds," saidRadford Small, SolarCity executive vice president of global capital markets, ina news release. "This transaction is an exciting addition anddiversification of our long-term financing options for solar assets."

SolarCity makes money leasing and selling solar systems tohomeowners and businesses and by selling electricity through long-term powerpurchase agreements. The company sells assets created by those customercontracts to investors in exchange for upfront cash.