In October 2016, the Company also entered into arrangements with SunEdison for the transfer of the balance of the equity interests in the Millenium, Azure, ESP Urja and SE 25 solar power plants in India, in each case following the expiration of the equity lock-up period in the applicable PPAs (ranging from November 2016 to March 2017) and without further action by SunEdison. Consideration for the transfer of the balance of the equity interests in these power plants was received by SunEdison in the form of shares of the Company’s Class B common stock that were issued to SunEdison at the time of the Company's IPO, and there was no further payment made by the Company to SunEdison at the time of the transfers. In accordance with these arrangements, in November 2016, December 2016 and January 2017, the balance of 26.0% of the equity interests in Azure, ESP Urja and Millenium, respectively, was transferred to the Company. In March 2017, 100.0% of the equity interests in SE 25 were transferred to the Company.
Termination of Renova - ESPRA
On March 29, 2016, the Company entered into a Termination Agreement (the “Termination Agreement”) with Renova with respect to the Securities Purchase Agreement dated July 15, 2015 among the Company, SunEdison and Renova relating to the ESPRA hydro-electric power plant (the “ESPRA SPA”). The Termination Agreement provides that, subject to the satisfaction of certain conditions, the ESPRA SPA will be terminated by mutual agreement of the Company and Renova. These conditions were satisfied on March 31, 2016 and the ESPRA SPA has been terminated. The Termination Agreement provides that the Company will pay Renova $10.0 million in connection with the termination of the ESPRA SPA. The Company made this payment to Renova on April 1, 2016. Pursuant to the Termination Agreement, the Company and Renova have granted each other full releases of any further obligations under the ESPRA SPA.
3. POWER PLANTS
Power plants, net consists of:
March 31, 2017
December 31, 2016
Solar power plants
Wind power plants
Total power plants in service, at cost
Less: accumulated depreciation
Total power plants in service, net
Construction in progress
Total power plants, net
The Company recorded depreciation expense related to power plants of $14.1 million and $13.6 million for the three months ended March 31, 2017 and 2016, respectively.
Construction in progress represents costs incurred to complete the construction of the power plants in the Company’s current portfolio that were either contributed to the Company by SunEdison or acquired from SunEdison. When power plants are contributed or sold to the Company after completion by SunEdison, the Company retroactively recasts its historical financial statements to present the construction activity as if it consolidated the power plants at inception of the construction. All construction in progress costs are stated at SunEdison’s historical cost.
Certain of the Company's solar power plants in India are entitled to receive viability gap funding support in an amount determined through a competitive bidding process. The viability gap funding support is funded by India’s National Clean Energy Fund and is paid by the offtake counterparty to these solar power plants, the Solar Energy Corporation of India, a not-for-profit company established by the Ministry of New and Renewable Energy to facilitate solar energy generation capacity in India. The program is expected to provide viability gap funding subsidies to the applicable solar power plants in the aggregate amount of INR 1,189.4 million, 50.0% of which is payable as early as three months after each power plant's commissioning, and 10.0% of which is payable each year for five years thereafter, subject to the plant meeting certain requirements. SECI is contractually obligated to establish an irrevocable letter of credit to secure its payment obligations.
The Company recorded the awarded viability gap funding in full as a reduction to the cost of power plants in service, with a $2.4 million and $2.3 million receivable included in current other assets, and $3.6 million and $3.4 million in other assets in the unaudited condensed consolidated balance sheet as of March 31, 2017 and December 31, 2016, respectively. The