Reznick Bundles Solar Installations for Investors
CohnReznick and Reznick Capital Markets Securities helped complete a funding structure to develop a 39.3 MW portfolio of distributed generation (DG) solar assets for Capital Dynamics, a global asset manager.
The portfolio of DG solar assets is located across nine locations in California and four locations in Massachusetts. The portfolio represents distributed generation with multiple off-takers including utilities, schools and municipalities.
“Nothing was built yet,” said Rob Sternthal, president of Reznick Capital Markets Securities. “They (the solar installations) were under construction or to be built.”
The portfolio of nearly 40 MW is comprised of mostly 1-2 MW systems. Although due diligence is done on each system, there were similarities among the deals that made them attractive for bundling, such as similar power purchase agreements and the same end users, in some cases.
“It’s all brought together by one party, Capital Dynamics, said Sternthal. “They’re the equity owner. The projects are all being built within six months or a year. They wanted to fund with one funding. We package for a lot of our clients. We package 20-40 systems, sometimes 200 systems, provided there’s some standardization to them.”
Packaging of solar projects is a model that some are trying to copy for energy efficiency projects. A recent article in the Guardian says althouh huge investment houses such as Deutsche Bank and Goldman Sachs have billions they’re looking to invest, they aren’t interested in smaller energy retrofit projects, even “small” multimillion-dollar projects. Because each deal requires bankers’ time, the big investors want bundled projects.
With energy efficiency, the problem is: how to find similarities in projects to bundle them. “How do you do due diligence on each of these projects?” asks Sternthal, adding that often the due diligence for a smaller DG project is the same as for a utility-scale project. But, he said that DG projects are becoming more standardized.
“Investors need product,” he added.
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