Power Finance & Risk is pleased to announce the short list for the following award: Renewable Energy Deal of 2019.

This is the largest and most competitive category, with six finalists. Please let us know if your firm is missing from the credits.

Aviator Wind

The Aviator Wind financing is impressive not only because of its size – the 525 MW project will be the largest single-phase, single-site wind farm in the US – but also because of the range of expertise demonstrated by sponsor Ares Management Corp. From identifying the project and negotiating the acquisition from original developer Apex Clean Energy, to scoring offtake contracts with Facebook and first-timer McDonald’s, to financing the project with construction and back-levered debt and tax equity ahead of closing on the acquisition, every aspect was deftly executed. The deal closed on August 30. Coverage here and here.

Sponsor: Ares Management Corp

Deal value: $456 million

Pricing: L+87.5 bp

Lead arranger: Santander

Tax equity: Berkshire Hathaway

Financial adviser: CCA Group

Sponsor’s counsel: Latham & Watkins

Lenders’ counsel: Winston & Strawn

Local counsel: Husch Blackwell

Independent engineer: Sargent and Lundy

 





Holstein 1 Solar

Even as hedged solar projects in Texas become more common, this transaction stood out because of the complex intercreditor interactions between the senior lenders, tax equity investor and hedge provider J. Aron, ahead of a simultaneous financial close and under time pressure to ensure the project would be online by summer 2020. The 200 MW project was under-hedged to capture merchant upside while also reducing shape and basis risk. The deal closed on July 19. Coverage here.

Developer: 8minute Solar Energy

Equity sponsor: Duke Energy Renewables Solar

Coordinating lead arranger: CIT Bank

Joint lead arrangers: Zions Bank, Rabobank

Tax equity: SunTrust

Financial adviser:  CCA Group

Hedge provider: J. Aron (Goldman Sachs)

Counsel to 8minute: Norton Rose Fulbright

Counsel to Duke: Troutman Sanders

Lenders’ counsel: Winston & Strawn

Counsel to SunTrust (tax equity): Akin Gump

Counsel to J. Aron (hedge): Hunton Andrews Kurth

Independent engineer and market consultant: ICF Resources

Hedge adviser: Snapper Creek

EPC: Blattner 

Lāwa’i Solar and Energy Storage

With 28 MW of solar generation capacity and 100 MWh of five-hour storage, the Lāwa’i Solar and Energy Storage project in Hawaii has been hailed as the first solar peaking plant in the world. It provides 11% of Kaua’i Island’s power. As the cost of combined solar and battery storage continues to fall, it will not remain the largest of its kind for long. The financing closed around the same time as commercial operations, on January 7.

Sponsor: AES Distributed Energy

Lead arranger: Société Générale

Tax equity investor: Republic Services

Borrower’s counsel: Akin Gump

Lenders’ counsel: Norton Rose Fulbright

Counsel to Republic Services (tax equity): Mayer Brown

Offtaker: Kaua’i Island Utility Cooperative

PPA length: 25 years

PPA price: $0.11/kWh


Project Nitrogen

After pioneering so-called convertible equity financing in 2018, NextEra returned with an even more complex version of the dynamic, levered partnership structure in 2019 to fund a 1,192 MW portfolio of utility-scale wind and solar projects. In the reboot, NextEra has the option to buy KKR out of the partnership in multiple chunks, requiring real-time resizing of the debt used by KKR to lever up its interest in the assets. Adding to the fun, the portfolio included assets with Southern California Edison PPAs and the bargain was struck against the backdrop of the PG&E bankruptcy case. The deal closed on June 11. Coverage here.

Sponsors: NextEra Energy partners, KKR & Co

Total value: $1.092 billion

Convertible equity financing: $900 million

Debt: $600 million

Lenders: Citi, MUFG

Counsel to NextEra: Skadden

Counsel to KKR: Kirkland & Ellis

Lenders’ counsel: Latham & Watkins

Prospero

After closing Phoebe – the first ever broadly syndicated quasi-merchant US solar deal – in 2018, developer Longroad Energy went back to the lab to concoct an even bigger deal to attract new lenders to this type of asset. The 300 MW Prospero project was also Facebook’s debut tax equity investment – an audacious move for a first-timer. Under pressure to get the project built by summer 2020 in Ercot, the parties closed the deal on May 16. Coverage here.

Sponsor: Longroad Energy

Total debt: $418 million

Term debt: $88 million

Tenor: C+7 years

Tax equity bridge: $225 million

Ancillary facilities: $105 million

Coordinating lead arranger: CIT Bank

Lenders: Silicon Valley Bank (JLA), Zions Bank (JLA), Helaba (Interconnection LC issuer), Rabobank (DSR LC issuer), Commerzbank (term debt lender), NAB (Hedge LC issuer)

Tax equity investor: Facebook

Hedge provider: Shell Energy North America

Borrower’s counsel: Norton Rose Fulbright

Lenders’ counsel: Winston & Strawn

Independent engineer, market consultant and transmission consultant: ICF Resources

Recurrent Energy Safe Harbor Loan

Solar safe harbor loans were a major theme of 2019 as several developers raced to qualify equipment for the 30% investment tax credit ahead of a step-down at the end of the year. Recurrent Energy’s version of the product is understood to have been the first of its kind to cross the finish line and also featured an unusual dual-tranche structure with a mezzanine component to replace equity capital. The senior loan closed on September 6 and the mezzanine loan on October 10. Coverage here.

Sponsor: Recurrent Energy (Canadian Solar)

Total senior debt: $124 million

Total mezzanine capital: $60 million

Portfolio size: 2.5 GW

Mandated lead arrangers: Rabobank, NordLB

Joint lead arrangers: ING, Silicon Valley Bank

Sole lead arranger (mezzanine loan) and lender (senior loan): Nomura

Borrower's counsel: Latham & Watkins

Senior lenders' counsel: Milbank

Mezzanine lender's counsel: Kirkland & Ellis

Admin agent (mezzanine loan): Wilmington Trust














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