Convergent Energy and Power has closed a programmatic construction-to-term loan, tax equity bridge loan, and letter of credit facility with Mitsubishi UFJ Financial Group (MUFG) that will accelerate the construction of a portfolio of distributed solar and energy storage projects across the United States.
Convergent will receive funding for its near-term distributed-scale systems as the developer breaks ground on “hundreds of millions of dollars” of new projects. The initial facility anticipates $150 million in funding. It also provides a framework for future financing rounds as Convergent adds to its existing $1 billion pipeline, which includes more than 800 megawatts (MW) / 1 gigawatt-hour (GWh) of energy storage and solar-plus-storage systems operating or under development.
“This construction facility ensures that we will continue to be a leader in providing cheaper, cleaner, and more reliable energy to businesses and utilities,” explained Convergent CFO and cofounder Frank Genova. “Distributed generation assets are integral to the clean energy transition and provide critical infrastructure to modernize our aging power grid.”
If this sounds familiar…
Convergent’s news comes amidst a string of similar deals for distributed energy projects. Last week, Dimension Energy closed on a major financing package supporting the development of 30 community solar projects across seven states. Dimension secured a $284 million construction and tax equity bridge loan from First Citizens, which acted as lead debt syndicator alongside ING, National Bank of Canada, Comerica, Cadence, Denham, and Siemens. Dimension also closed on a structured equity investment from HA Sustainable Infrastructure Capital, Inc. (HASI) in a new project joint venture.
The Dimension deal closely mirrors one recently announced by fellow community solar developer Pivot Energy, also led by First Citizens Bank and including a joint venture with HASI. First Citizens will supply Pivot with a $450 million debt warehouse that supplies the flexibility needed to continually pump out new projects.
“It’s very sustainable for us to build our business on,” Pivot’s chief financial officer Bret Labadie told Renewable Energy World.
Labadie, like many of his peers, has encountered little change in attitude in the clean energy investment space since November’s Presidential Election.
“There has been zero hesitation whatsoever from our lenders and investors,” Pivot’s CFO said. He believes rapid electricity demand growth has created a fundamentally different supply dynamic that will allow renewable projects to keep getting built, regardless of who is in the White House.
Another developer, Doral Renewables, is currently constructing giga projects Vista Sands and Mammoth Solar on farmland in the midwest. While its endeavors are demonstrably different from a batch of smaller distributed projects, chief financial officer Nick Cohen tells Renewable Energy World that he has seen nothing but smooth sailing on the finance front, thanks in part to having a lot of the moving pieces already locked into place- and one undeniable fact.
“Solar and renewable energy is the lowest cost of energy,” Doral’s CFO puts it plainly. “So it’s a fundamentally good business proposition for investors, for communities, for farmers, and for rural America.”
As for the distributed side of the equation?
“We’re very confident that the fundamentals of the business will continue to remain sound,” Pivot’s Labadie confirmed.
