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How technology adds value for clean energy investors

Reposted from FinTek News, published 4/4/19.

CleanCapital Solar Tech
Solar Tech

CleanCapital is sometimes described as a fintech company. While I’m not sure that label really suits us, it’s certainly true that my experience with fintech provided the ‘light bulb’ moment that led to founding CleanCapital. Today, technology underpins all that we do.

Clean energy assets present enormous opportunity.

Renewable energy is at a ‘hockey stick’ moment for worldwide growth. Bloomberg New Energy Finance projects that $11.5 trillion will be invested in new power generation capacity between 2018 and 2050, with $8.4 trillion of that going to wind and solar and another $1.5 trillion to other zero-carbon technologies like hydro and nuclear.

Why are investors so bullish on renewable energy? Clean energy sources will make up 80% of the world’s new energy capacity through 2050, with renewables providing at least 50% of the world’s electricity that year. That creates enormous opportunity for infrastructure investment. Investors looking to add real assets to their portfolios are drawn to solar, wind, and storage generation for a number of attractive attributes. Renewable power infrastructure portfolios boast stable cash flows, low volatility, diversification of risk, and alignment with investors’ ESG goals.

But barriers to entry pose challenges for investors.

Despite growing demand for these investment opportunities, the complexity of clean energy deals has historically kept investors away.

As an attorney working on landmark clean energy financing deals, I saw how the lack of standardization in contracting, regulations, and diligence made it near-impossible to invest in distributed clean energy assets at scale. Having seen how fintech was streamlining other industries, like student loans, I sensed an opportunity to leverage technology to simplify the process and enable more investors to buy in.

Any given clean energy acquisition is comprised of close to a hundred documents; multiply that by the ten, 20, or 60 projects that make up a single portfolio and you’ll get a sense of the organizational issue at hand. A buyer often works with five to ten parties in addition to the seller to close an acquisition, so project management and communication are also a challenge. We envisioned a technology-based solution that would organize information and process flow.

Our tech-based solution will power the transition to a clean energy economy.

Today, our leading edge platform enables us to underwrite, diligence, and manage renewable energy portfolios efficiently. The response from the market has been robust; industry leaders, including BlackRock, rely on our platform capabilities to meet the demand for clean energy investment and deliver value to clients. Going forward, I envision greater adoption of technology, including data analytics, in all facets of clean energy investment to underpin the dramatic growth of these resources around the world.

Estonian Chamber of Commerce & Industry: Thorgate, CleanCapital partnership is accelerating clean energy investment through technology

Estonian Chamber of Commerce & Industry: Thorgate, CleanCapital partnership is accelerating clean energy investment through technology

Estonia-based Thorgate has worked with CleanCapital to custom-develop the platform that underpins CleanCapital’s acquisition process. The platform enables CleanCapital and its partners to assess the value of potential investments with speed and accuracy; conduct diligence and close deals in 60 days or less; and manage assets into the future, including ongoing communication with investors. Thanks to the technology, CleanCapital has become an industry leader in renewable energy investment and is giving investors access to the substantial untapped opportunities in the space.

CleanCapital and BlackRock Announce New Partnership to Drive Capital into Distributed Clean Energy Markets

NEW YORK (Nov. 8, 2018) – CleanCapital is pleased to announce a new partnership with BlackRock’s global renewable power platform today with the closing of a 46.9 MW portfolio of solar assets from ATN International, Inc. subsidiary, Ahana Renewables. The portfolio consists of 60 operating solar projects located in California, Massachusetts and New Jersey. The acquisition is CleanCapital’s largest to date.

This transaction highlights both CleanCapital and BlackRock Real Asset’s ability to execute on large, complex deals in the distributed clean energy space. CleanCapital’s technology-driven approach, coupled with access to dedicated capital from funds managed by BlackRock, streamlines and expedites due diligence and analysis, allowing complex deals to close efficiently. In partnering with CleanCapital, BlackRock Real Assets has expanded its footprint in the renewable power sector and further demonstrated its commitment to the attractive investment opportunities in sustainable real assets presented by the global energy transition.

With today’s announcement, CleanCapital has now acquired nearly $250 million of operating solar assets in the United States since its founding less than 3 years ago. It has done so by pairing institutional capital with technology solutions that simplify underwriting in this fragmented space. In fact, this was the first acquisition that was managed entirely through CleanCapital’s diligence software platform.

“This transaction ushers in a new phase for CleanCapital as we launch our partnership with one of the world’s leading renewable power investors, BlackRock, leveraging our cutting edge software,” said Thomas Byrne, CEO of CleanCapital. “As the energy landscape becomes cleaner and more distributed, CleanCapital will continue to create solutions and partnerships that deliver capital throughout this transforming market.”

“BlackRock Real Assets is excited to launch this new partnership with CleanCapital, which will allow us to more efficiently deploy capital in the distributed generation sector of renewable power on behalf of our clients. Investors are increasingly interested in the investment opportunities presented by the rapidly changing clean energy space, and we’re pleased to invest in solar assets that are well-positioned to capitalize on those trends,” said David Giordano, Managing Director and Head of Renewable Power Americas and APAC at BlackRock. “We look forward to working with CleanCapital as we continue to grow our investments in distributed clean energy.”

To learn more, visit cleancapital.com

About CleanCapital
Founded in 2015, CleanCapital is a financial technology company that makes it easy to invest in clean energy. CleanCapital has built a proprietary technology platform that identifies, screens, and manages clean energy projects enabling project owners an opportunity to exit their portfolios while providing accredited investors, including institutional investors, family offices, and investment funds, unique access to the clean energy investment market. Stay up to date on the evolving market of clean energy finance by following the company on Twitter or Facebook or connecting via LinkedIn. Learn more at http://www.cleancapital.com.

About BlackRock
BlackRock helps investors build better financial futures. As a fiduciary to our clients, we provide the investment and technology solutions they need when planning for their most important goals. As of September 30, 2018, the firm managed approximately $6.44 trillion in assets on behalf of investors worldwide. For additional information on BlackRock, please visit www.blackrock.com | Twitter: @blackrock | Blog: www.blackrockblog.com | LinkedIn: www.linkedin.com/company/blackrock.

About Ahana Renewables
Ahana Renewables, a subsidiary of ATN International, Inc., is a specialized investment firm focused on alternative energy and long-lived real assets. The company brings its experience to various infrastructure asset classes, capitalizing on bankable technology and strong project fundamentals. Ahana Renewables’ core expertise lies in deal sourcing, public/private contract negotiations and financial structuring to take controlling, owner/operator positions in projects and portfolios. Headquartered in San Francisco with offices and affiliates in Massachusetts, Singapore, and Hyderabad, the company currently operates distributed solar portfolios in India. More information is available at www.ahanarenewables.com.

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A rollercoaster week for the broader markets, but business as usual for clean energy assets

It has been a tumultuous week in the financial markets. It’s not the first time, and most certainly not the last time, that risky assets such as global public equities have seen such extreme short-term volatility. But it also serves as a reminder that asset classes such as renewable energy infrastructure are insulated from whipsaw action. At CleanCapital, we own and manage projects that deliver steady cash flows, underpinned by the long-term contracted sale of a basic necessity to our customers. We’ve known for some time that cumulative default rates for Infrastructure and Project Finance are significantly lower than for NFC (non-financial corporates); 1.83% vs 3.45% in the 2006-2016 period according to S&P Global Fixed Income Research. However even equity investment delivers highly predictable cash flow with annualized distributions usually within 1-2% of expected projections.

These assets have proven technology, limited operational risk, long-term residual value upside and  broad-based political and regulatory support, particularly at the state level. This week has been business as usual for CleanCapital—we’re paying attention to the broader markets but marching along to deliver steady value for our investor base.

The evolving art of the clean energy deal

When I joined CleanCapital as the Head of Origination, I was excited about the company’s approach to leveraging technology and data to streamline the clean energy finance process. I have spent most of my career navigating the cumbersome transaction process of structuring and cobbling together financing sources across a variety of renewable energy asset classes including wind, solar, biomass and fuel cells. The opportunity to adapt FinTech tools and skills to the renewable energy market is an obvious and natural progression for the industry. CleanCapital demonstrated that they are ahead of the pack and I am pleased to be part of it.

I joined the CleanCapital team to head up their effort with the identification of solar power acquisitions and help expand market opportunities in projects that are under development as well as additional renewable energy and clean infrastructure asset classes.

Solar Portfolio 3.1

New assets in MA.

Leveraging technology and data to identify assets

Last week we announced the acquisition of our second solar portfolio in just 30 days. The portfolio of two operating solar projects, acquired from G&S Solar, are located in Massachusetts and leverage the $250 million equity partnership with CarVal Investors. Earlier in May, we announced the acquisition of  a 14.23MW portfolio of solar assets from X-Elio. In addition to working with terrific developer partners, these purchases are significant. They demonstrate our team’s ability to leverage our proprietary technology to implement an efficient diligence process to underwrite complex opportunities and turn them into investment ready assets.

Two examples of where CleanCapital leveraged FinTech tools in these transactions include, the use of our proprietary platform that BOTH facilitated data transfer and diligence from the sellers, as we well as comprehensive and ease of underwriting by our investor partners. This efficient use of technology is helping us to close transactions quickly and thereby drive down the cost of capital.

This competitive advantage will continue to work for us. We look forward to talking with you about how we can work together and apply that to more opportunities.

The next phase of clean energy origination

This is a marked departure from the status quo when it comes to origination.  This latest announcement brings CleanCapital’s total to nearly $150m of acquired operating solar assets. It’s an exciting year for our team as we continue to change the paradigm for clean energy finance. Despite the historic growth across the industry, the flow of capital within the space remains largely stagnant. In the last 30 days I’ve been able to witness just how significantly technology solutions can address these challenges.

Growing our partnership with Carval Investors

The acquisition of this portfolio continues to leverage our new partnership with CarVal Investors. Leveraging our proprietary platform and capital partnerships, the CleanCapital team continues to bring liquidity to a historically capital inefficient clean energy marketplace.

Learn more about the new partnership to acquire up to $1 billion in clean energy assets

 

CleanCapital announces $250 million equity partnership with CarVal Investors

New partnership, supports growing clean energy marketplace with up to $1 billion available to acquire and invest in solar projects

NEW YORK, NY- [April 9, 2018] CleanCapital, a fintech company that makes it easy to invest in clean energy, and CarVal Investors, a leading global alternative investment fund manager, today announced a new $250 million equity partnership that, including debt financing, enables the acquisition of up to $1 billion of clean energy assets. This partnership harnesses CarVal’s expertise across different asset classes and creates an opportunity to define clean energy as an investment-ready opportunity. To date, the CleanCapital team, founded by Jon Powers, Thomas Byrne, and Marc Garrett, has acquired nearly $100 million of operating solar projects. Their proprietary platform streamlines and expedites due diligence and analysis, allowing complex deals to close in less than 60 days.

The solar industry is on track to reach over 100GW of capacity by 2023; however, the flow of capital within the space remains largely stagnant. CarVal has a successful track record of leveraging the securitization market to enhance returns and tapping capital markets to broaden investable opportunities. This expertise will allow CleanCapital to bring much-needed liquidity to the historically capital-inefficient clean energy marketplace.

“CleanCapital’s approach is game-changing for accelerating investments in a sustainable energy future for America,” said Jerry Keefe, principal at CarVal Investors. “Their proprietary methodology to acquire solar assets takes what was once a complex and cumbersome process and makes it simple and secure for developers. We believe these assets have the potential to be solid, high-performing investments with predictable cash flows for investors. We’re excited to partner with CleanCapital as they continue to grow the clean energy economy and bring much-needed capital to the sector.”

“As the investment needs in renewables grow, broader participation from institutional investors is critical to transition from fossil fuels to a clean energy economy. This substantial capital commitment multiplies our ability to provide project owners with opportunities to successfully exit their portfolios. I’m convinced that the flow of capital into clean energy is irrepressible, and this deal is one more step in unlocking the billions of dollars of untapped capital sources that have been absent from this sector,” said Thomas Byrne, Co-founder and Chief Executive Officer of CleanCapital. “Partnering with CarVal Investors, one of the most dynamic and innovative capital partners in the market, increases the resources and experience to accelerate toward that goal.”

CleanCapital was connected to CarVal through Finitive, a financial technology platform providing institutional investors with access to alternative lending investments.

“Using its proprietary financial technology platform, CleanCapital has established a leadership role in the acquisition of solar renewable assets. We are excited that CleanCapital and CarVal have partnered to further accelerate the growth of CleanCapital’s portfolio. With this partnership and the capital provided by CarVal, CleanCapital will be able to achieve its acquisition goals for the near and medium term,” said Jon Barlow, Executive Chairman and founder of Finitive.

CleanCapital is a financial technology company that makes it easy to invest in clean energy. They deliver technology solutions to all aspects of the transaction processfrom lending to capital raising, origination to diligence. The proprietary technology platform identifies, screens, and manages clean energy projects enabling project owners an opportunity to exit their portfolios while providing accredited investors, including institutional investors, family offices, and investment funds, unique access to the clean energy investment market.

About CleanCapital:

Founded in 2015, CleanCapital is a financial technology company that makes it easy to invest in clean energy. CleanCapital has built a proprietary technology platform that identifies, screens, and manages clean energy projects enabling project owners an opportunity to exit their portfolios while providing accredited investors, including institutional investors, family offices, and investment funds, unique access to the clean energy investment market. Stay up to date on the evolving market of clean energy finance by following the company on Twitter or Facebook or connecting via LinkedIn. Learn more at http://www.cleancapital.com.

About CarVal Investors

CarVal Investors is a leading global alternative investment fund manager focused on distressed and credit-intensive assets and market inefficiencies. Since 1987, CarVal has invested $103 billion in 5,300 transactions across 79 countries. CarVal has a history of successful energy and power investments and is innovative in structuring partnerships in the renewables industry. For more information, visit www.carvalinvestors.com.

About Finitive

Finitive is a financial technology platform providing institutional investors with turnkey, zero-fee access to alternative lending investments. Its highly selective process, world-class investment team, and unique platform efficiently deliver capital to its originator partners. Through Finitive, institutional investors access a multi-trillion-dollar market that encompasses a broad spectrum of non-bank lending sectors, including specialty finance, online lending, marketplace lending, and private credit funds. Finitive’s originator partners gain efficient access to a global network of investors who are actively allocating to alternative lending.  All regulated activities are conducted through North Capital Private Securities, member FINRA/SIPC. For additional information, please visit Finitive’s website at www.finitive.com.

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For more information:
Contact: Lauren Glickman, press@cleancapital.com, (504) 258-7955

Episode 16: Ron Suber

President Emeritus of Prosper Marketplace