Berkshire Hathaway Energy, the energy division of Warren Buffet’s huge investment company, made a big impact on the tax equity market in 2019, writing sizeable checks to allow market-leading projects to come to fruition.
While tax equity is typically dominated by a few large US banks, Berkshire Hathaway has carved out a name for itself with its large appetite for tax-oriented investment and a “flexible” approach to dealmaking, according to judges.
One marquee transaction for the BHE team in 2019 was the tax equity financing of Ares Management’s 525 MW Aviator wind farm in Texas, which will be the largest single-phase, single-site wind farm in the US.
The tax equity for that project alone exceeded $400 million.
Market participants attribute BHE’s nimbleness in part to its position as a wind project owner and operator in its own right, through MidAmerican Energy.
Thomas Budler, who oversees tax equity as president of BHE Wind, is said to be “smart about how he thinks about using a finite resource selectively.”
Market participants also noted that BHE is a frequent collaborator with GE Energy Financial Services. In 2019, for instance, the two companies teamed up to provide commitments for E.On Climate & Renewables’ Panther Creek I and II and Scout Clean Energy’s Ranchero and Heart of Texas wind farms, all in Texas, and Geronimo Energy’s Crocker Wind project in South Dakota.
These deals have a wide range of non-standard features. The Panther Creek projects are repowerings, while the output of Ranchero and Heart of Texas is guaranteed under proxy revenue swaps. Crocker has power purchase agreements with food producer Cargill and retailer Walmart.
“They do what they say they’re going to do, and they can do it in size,” notes a satisfied client.
See all of the 2019/2020 awards