Intersect Power looking to raise structured financing for next generation of solar projects
Utility scale solar developer Intersect Power is currently looking to raise a structured financing facility as it moves towards the development of its next generation of projects, said three sources familiar with the situation
Intersect engaged Morgan Stanley and BAML to assist in this among other capital raising functions for the developer, including construction financing and tax equity.
The San Francisco-based developer completed a capital raise in January which included securing USD 127m in equity funding from Climate Adaptive Infrastructure LLC and Trilantic North America and others. The transaction resulted from Softbank Energy (SB Energy) selling its equity interest in Intersect, said one of the sources.
SB Energy did not sell its equity interests in a portfolio of 1.7GW of late-stage development projects, which were developed by Intersect, as part of that transaction. The January fund-raise was split into the equity round, plus an additional USD 482m debt facility with Generate Capital and CarVal Investors.
On tap next is 2.3 GW of late-stage development encompassing a group of projects in CAISO and ERCOT, according to Bill Green, managing partner of CAI in an interview with NPM. This encompasses the likes of a massive 500 MW solar + storage project Oberon and the 313 MW Athos III project, both in California.
The structured financing is expected to fund pre-development costs associated with the project pipeline, as well as straight to the equity. The financing would likely be structurally subordinate to tax equity that comes in the door and will have a blended interest rate being talked in the high single digits, said those sources.
Intersect Power declined comment on the capital raise. BAML and Morgan Stanley did not return calls seeking comment.
Portfolio financings are starting to be more commonplace particularly as the structure and tenor of the purchase power agreement (PPA) has started to vary between projects. New Energy Equity closed a USD 50m unitranche earlier this month with Silicon Valley Bank and SVB Capital to fund construction of community solar projects, totaling 60 MW in New York State and other markets.
Intersect was founded in 2016 by former Recurrent Energy executives Sheldon Kimber and Luke Dunnington and has overseen 2 GW of solar to commercial operations across 60 plus projects with another 1.7 GW currently under construction.
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