Spain's Fotowatio said Monday it has agreed to buy MMA Renewable Ventures, one of the best known solar power project developers in the United States.

The Baltimore, Md.-based Municipal Mortgage & Equity (MuniMae), owner of MMA Renewable, has signed the contract to sell the majority of MMA Renewable's assets for $19.7 million. The deal will cover about 35 megawatts worth of solar projects currently in operation, including the 14-megawatt plant at the Nellis Air Force base in Nevada, said Mark McLanahan, MMA Renewable's senior vice president for corporate development. Fotowatio will have more than 400 megawatts worth of projects under development after the purchase.

MMA Renewable was operating 40 megawatts worth of solar power projects by the end of 2008 (see MMW Renewable Ventures to Raise Its Fifth Solar Fund). But MuniMae is keeping some smaller, early projects.

The difficulty in raising capital during the economic downturn prompted the sale, said Michael L. Falcone, CEO of MuniMae, in a press release. MuniMae, whose shares are traded over the counter under the symbol "MMAB," is in the business of securing debt and equity financing for real estate and energy project owners and developers.

MMA Renewable, which finances, owns and operates commercial solar energy projects, did $115 million worth of transactions in 2008, down from $234 million in 2007, said MuniMae.

The tough fundraising climate could lead to other mergers in the solar sector, said Matthew Cheney, CEO of MMA Renewable, although he noted that merger and acquisition activities have remained low in the marketplace. Cheney will remain the CEO for the new business unit for Fotowatio, which will be called Fotowatio Renewable Ventures.

"Because of market conditions, there are opportunities for like companies to merge and join forces and operate more efficiently. You will see some alliances," Cheney said.

The acquisition will give Fotowatio a larger presence in the growing U.S. market. Fotowatio, founded in 2004, has largely focused on developing solar power projects in Spain. It raised $350 million from GE Energy Financial Services and Grupo Corporativo Landon in Madrid last year.

Fotowatio said it has invested more than $880 million in those projects since 2006, and plans to invest up to $3.2 billion in Spain, Italy and the United States by 2012.

"A lot of large, well capitalized project developers will start buying portfolios from smaller developers that are having trouble getting access to capital. Fotowatio has a lot of cash on hand," said Daniel Englander, Greentech Media's senior energy analyst, who is the author of an upcoming report, Global PV Demand Through 2012: The Anatomy of a Shakeout II.

After completing the deal to buy MMA Renewable, Fotowatio will own more than 130 megawatts of solar power projects in operation in both Spain and the United States, and more than 1 gigawatt worth of projects under development in those countries as well as Italy.

MuniMae is retaining some of the early projects developed by MMA Renewable, such as the 901-kilowatt installation at Fetzer Vineyards in Hopland, about two hours' drive north of San Francisco.

The joint venture that MMA Renewable and Suntech Power Holdings created last year will continue as a partnership between Suntech and Fotowatio Renewable Ventures, Cheney said. The joint venture, Gemini Solar Development, focuses on developing and operating solar power plants of 10 megawatts or more (see Suntech Buys EI Solutions, Teams Up with MMA).

Fotowatio is one of Suntech's larger customers in Europe, and its exclusive focus on solar project development – as opposed to MuniMae's focus on real estate development – would make Fotowatio a better partner, said Steven Chan, Suntech's chief strategy officer.

"We met with Fotowatio before the acquisition and re-confirmed that we [MMA, Fotowatio and Suntech] are extremely excited at the prospects of synergistic cooperation in the future," Chan said in an email.

Fotowatio' acquisition is expected to close within 60 days, Cheney said.

Join industry leaders and influencers at Surviving the Shakeout: Greentech Media’s 2009 Solar Industry Summit in Phoenix, Ariz., April 14–15.