Amid solar trade case uncertainty, funding is still flowing for solar developers
The AD/CVD trade case has stalled and/or caused the cancellation of many larger solar projects this year, but news of big investments for new projects continue to flow into my inbox.
DSD Renewables (DSD) just secured a $70 million tax equity investment from Morgan Stanley Renewables Inc. to support the development of more than 87 MWs of distributed solar and storage systems to be placed in service this year. This is the second partnership between the two. Morgan Stanley previously contributed to a $250 million fund raised by DSD in 2019 to support a similar portfolio of projects.
“Morgan Stanley continues to be a valuable financial partner and this follow-on investment will allow us to continue delivering projects and value at scale,” said Jamie Hutson, Chief Investment Officer at DSD. “The tax equity financing will enable us to unlock the full value of projects, benefiting all stakeholders involved.”
The fund will support commercial power purchase agreement (PPA), feed-in-tariff and community solar projects, with a sizable portion going toward projects in New York, New Jersey, and California. The tax equity financing enables DSD to capture the full tax attributes of the systems and optimize value.
A month prior, DSD secured a $200 million preferred equity investment from a fund managed by the Infrastructure and Power strategy of Ares Management Corporation to fuel continued strategic growth.
Meanwhile, Encore Renewable Energy secured $20 million senior loan provided by Lacuna Sustainable Investments and Javelin Capital. This interim debt financing retires existing debt and provides significant growth capital for expansion into new geographic markets and the advancement of innovative clean energy solutions including solar + storage, brownfield redevelopment, and dual land-use agrivoltaic initiatives.
Lacuna and Javelin are both solution-based providers of strategic capital to renewable energy clients.
“This infusion of capital comes at a critical time in our company’s growth trajectory and will allow us to accelerate our strategic plan and enhance our ability to deploy distributed solar and storage in our core markets and beyond,” offered Blake Sturcke, President of Encore Renewable Energy. “The energy transition is unstoppable and despite the uncertainty currently facing our industry, this commitment from investors with deep sector expertise underscores the value of our work to build the clean energy economy.”
Earlier in the week, Origis Energy closed a $375 million credit facility for its solar and energy storage development project pipeline. CIT, a division of First Citizens Bank, along with Deutsche Bank, HSBC, Nomura, Rabobank, and Santander were coordinating lead arrangers of the facilities. Also of note: the facility was oversubscribed.
“As one of the most active renewable energy developers in the country, Origis was uniquely suited for a financing of this type,” said Mike Lorusso, Managing Director and Group Head for CIT’s Power and Energy unit. “We very much enjoyed working closely with them to structure this innovative financing and look forward to opportunities to support their future endeavors.”
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