New Energy Equity (NEE), a solar projects developer based in the U.S., has secured a $50 million unitranche revolving loan facility. The round was led by Silicon Valley Bank and SVB Capital, financial partners in the renewable energy and technology industry. The facility will be used to build community solar projects of 60 MW or more in New York and other markets.
SVB Capital is the lender, and Silicon Valley Bank is the sole coordinating lead arranger for the facility.
A unitranche revolving facility is a single tranche term loan facility. It is a blended interest rate issued by financial institutions. It allows the borrower to repay, withdraw, and drawdown according to their financial requirements. Because of its repayment and re-borrowing options, it is considered a flexible financial strategy.
The funding will be used to help build community solar assets as part of state-sponsored distributed generation programs. The facility covers a major portion of the project’s construction and financing expenses. It allows the company to meet its working capital needs while also allowing for asset flexibility, subject to lender approval.
Matthew Hankey, President, Co-Founder, and CEO of New Energy Equity, said, “We are excited to enter into this new partnership with Silicon Valley Bank and SVB Capital. Their dedication to making community solar work will enable us to deliver renewable energy to more communities and customers on more favorable terms.”
Community solar projects are at the forefront of the energy transition in the U.S. A wide range of customers, including commercial, industrial, and residential, have access to renewable energy without installing solar panels on their property.
According to a report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie, 177 MW of capacity was added under the community solar segment in the U.S. in Q2 2021. This was an increase of 16% from Q2 2020.
Earlier, global private markets firm Partners Group acquired a controlling equity stake in Dimension Renewable Energy. The distributed energy platform focuses on community solar and battery storage across the U.S.
According to Mercom’s 1H and Q2 2021 Solar Funding and M&A Report, debt financing activity in 1H 2021 was $8.2 billion. This was 125% higher compared to the first half of 2020, when $3.7 billion was raised.
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