A seminal financing advances CleanCapital’s long-term goal of securitizing distributed renewable energy portfolios to attract institutional investors.
A 75 megawatt acquisition along with a landmark financing solidify CleanCapital’s position as one of the leading owner-operators of C&I solar in the U.S. and a pioneer in clean energy finance.
NEW YORK—July 18, 2019—CleanCapital announced today its largest acquisition to date, a 75.2 megawatt solar portfolio made up of 15 operating solar projects in New Jersey. This is the fourth in a series of acquisitions made through CleanCapital’s $250 million investment vehicle with CarVal Investors. CleanCapital now owns and operates 180 MW of renewable energy assets and holds $465 million worth of assets under management.
Concurrent to this acquisition, CleanCapital and funds managed by CarVal Investors have closed on a $300 million debt warehouse facility with Credit Suisse.
The solar portfolio, dubbed “Olympic”, was acquired from KDC Solar LLC (“KDC”). KDC, a private, non-utility affiliated owner and operator of large-scale C&I solar power generation, is majority owned by Diamond Castle Holdings, LLC. Fox Rothschild represented KDC in this deal.
The 15 operating solar assets, which entered commercial operation between 2011 and 2016, average 5 MW and range in size from 157 kW to 10 MW. Off takers for these projects include Fortune 100 companies as well as local governments and institutions.
“This acquisition, our largest to date, solidifies CleanCapital’s position as one of the leading owner-operators of C&I solar in the U.S.,” said Thomas Byrne, CEO of CleanCapital.
The acquisition was led by Melinda Baglio, Chief Commercial Officer and General Counsel at CleanCapital, who added, “This portfolio is a perfect illustration of how our technology gives us a competitive edge when it comes to conducting due diligence on sizable and complex portfolios.”
“As one of the largest C&I solar developer/owner/operators in New Jersey we are pleased to close this transaction with CleanCapital, which is focused on owning C&I solar projects and has the ability and scale to own and operate these C&I projects for many years to come,” said Alan Epstein, President and CEO of KDC Solar LLC.
The Olympic acquisition illustrates CleanCapital’s effective execution on the aggregation strategy launched in partnership with CarVal Investors in 2018. The company plans to leverage the proceeds to further accelerate acquisitions of small-scale renewable energy projects throughout the U.S., building well-constructed portfolios attractive to institutional investors in the ABS market.
“The debt warehouse facility grants us access to a new type of financing, bolstering our overall capital capacity to acquire distributed solar and energy storage projects,” said Matt Eastwick, Chief Investment Officer at CleanCapital. “This seminal financing takes us a step closer to our long-term vision of securitization, which is key to our mission to drive institutional investment in clean energy.”
“We’re proud to partner with CleanCapital,
whose innovative approach to structuring these investments has made it, in our
view, the clear industry leader in clean energy finance,” said Jerry Keefe,
Principal at CarVal Investors. “With CleanCapital’s active approach to asset
management, we believe renewable energy portfolios have strong potential as long-term
investments. Our acquisitions in partnership with CleanCapital total more than
100 MW since May of last year, reflecting our confidence in these assets.”
CleanCapital is an industry-leading clean energy investment platform. Launched in 2015 by co-founders Thomas Byrne, Jon Powers, and Marc Garrett, CleanCapital’s mission is to accelerate investment in renewable energy to address the urgent threat of climate change. CleanCapital has leveraged investments from BlackRock, CarVal Investors, John Hancock, and other partners to acquire more than $465 million of distributed operating solar assets. Learn more at 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 $114 billion in 5,340 transactions across 80 countries. CarVal has an established history of energy and power investments and is innovative in structuring partnerships in the renewables industry. For more information, visit www.carvalinvestors.com.
Today we announced that BlackRock’s Renewable Power Group took a stake in CleanCapital. Their investment fuels the continued growth of our company and provides capital to accelerate our clean energy acquisitions.
For CleanCapital, this marks a kind of end to the beginning of our company story. Marc Garrett, Jon Powers, and I launched CleanCapital with a clear vision: to attract institutional capital to clean energy investment. Not only have we achieved that founding goal, we’ve done it by earning the trust of the world’s largest asset manager.
Expanding our partnership
We’re thrilled to expand our partnership with the team at BlackRock. Led by David Giordano globally and Martin Torres here in the Americas, the partnership gives institutional investors—who are showing increasing interest in real assets—access to the growing renewables market. Their investment empowers us to grow our solar portfolio and also pursue opportunities in new geographies and new clean energy asset classes, like energy storage.
Last year, we partnered with BlackRock on our largest acquisition to date. It was no small feat; the 47 megawatt portfolio, comprised of 60 solar projects in three states, was one of the largest independent C&I solar portfolios in the U.S. A complicated deal like that turned out to be the perfect opportunity to show the team at BlackRock the value of the CleanCapital platform. Using our technology to perform detailed underwriting, our seasoned investment team provided BlackRock with a clear understanding of the opportunity at hand. And we closed the deal with speed and certainty.
Driven by a common mission
BlackRock Chairman & CEO Larry Fink has been outspoken in his belief that the best returns come when you invest with purpose. We believe that by providing access to the growing opportunities in renewable energy we can deliver value to investors and do good for the planet. Through this partnership, we will acquire more high-quality solar and storage projects to build superior portfolios for our investors.
I look forward to sharing more milestones with you as we put this capital to work.
CleanCapital is actively seeking to acquire solar and storage projects. Interested in selling your project? We should talk.
NEW YORK – April 2, 2019 – CleanCapital, an industry-leading clean energy investment platform, announced today a new investment in the firm from funds managed by BlackRock’s Renewable Power Group, which bolsters the ability of the two firms to invest together in clean energy projects.
The investment provides for the continued growth of CleanCapital as it expands into new markets and new renewable energy asset classes, with a specific focus on distributed solar and energy storage.
“The investment from BlackRock’s Renewable Power Group will accelerate CleanCapital’s investment in clean energy, allowing us to enter new asset classes, like energy storage, and expand into new markets. With this investment, we will continue to build out our portfolio and do what we do best: use our proprietary underwriting tools and software to quickly evaluate assets and efficiently close acquisitions,” said Thomas Byrne, CEO and co-founder of CleanCapital.
The latest transaction marks a deepening of the relationship between CleanCapital and BlackRock after the two firms closed on CleanCapital’s largest transaction to-date in November, the acquisition of a 46.9 megawatt portfolio of 60 operating solar energy projects.
“As the clean energy space evolves, the distributed generation sector is expanding and plays an increasingly important role in the U.S. energy transition,” said Martin Torres, Head of the Americas for the Renewable Power Group at BlackRock. “This partnership allows us to access CleanCapital’s platform capabilities as we seek to invest in the assets meeting the demand for clean energy while delivering value to our clients.”
Launched in 2015 by co-founders Thomas Byrne, Jon Powers, and Marc Garrett, CleanCapital today owns and manages $300 million of distributed operating solar energy assets in the United States, with a combined capacity of more than 100 MW. The firm owns and operates 108 solar energy systems in 11 states, ranging in size from 25 kW to 12.6 MW.
CleanCapital is an industry-leading clean energy investment platform. Its mission is to accelerate investment in renewable energy to address the urgent threat of climate change. CleanCapital’s leading edge technology platform facilitates the evaluation and acquisition of clean energy assets with speed and certainty. Since 2015, CleanCapital has leveraged investments from BlackRock, CarVal Investors, John Hancock, and other partners to acquire more than $300M of distributed operating solar assets. Learn more at cleancapital.com | Twitter: @cleancapital_ | LinkedIn: linkedin.com/company/cleancapital/
Clearway Energy announced today that it will significantly reduce its quarterly dividend “to proactively maintain balance sheet and capital allocation flexibility during this period of uncertainty with one of Clearway’s largest customers.”
The customer in question is PG&E, which declared bankruptcy on January 29. The uncertainty is regarding the status of its long-term power purchase agreement (PPA) contracts. PG&E’s bankruptcy filing automatically triggered default, and the long-term fate of those contracts is an open question. Jarring events like bankruptcy happen from time to time in every industry, but today’s news underscores the risk sometimes associated with concentrated investments.
While the ultimate financial impact of PG&E’s bankruptcy on Clearway Energy and other PPA counterparties—if it impacts those companies at all—will not be known for some time, the magnitude of exposure to risk here is clear. At CleanCapital, a highly diversified acquisition strategy is our way of ensuring that we’re insulated from all types of “event risk”. We own and manage a broad spectrum of small-scale solar projects representing a wide range of geographies, a multitude of off-takers, and various types of contracted revenue. This diversification gives debt and equity providers comfort that the negative impact of any solitary issue will be limited and contained.
Diversification is a tactic designed to minimize risk and optimize returns; investing in distributed assets is one strategy to achieve that objective in renewable energy markets. I guess we’re putting a slight twist on the old adage: ”Don’t put all your electrons in one basket.”
For more insight on how PG&E’s bankruptcy is changing the energy investment landscape, read Four Challenges that will Shape Electric Utilities this Decade from Derek Daly, Director of Investments & Capital Markets for CleanCapital.