Urban Grid's debt refinancing to push its pipeline into construction phase

The close of USD 275m in debt refinancing recently between Urban Grid Solar and Crayhill Capital Management furthers a relationship that began in 2019 with a USD 150m development line and will facilitate the realization of a pipeline with more than 12 GWs of potential solar energy.

The original USD 150m was intended for Urban Grid to spend on development expenses for projects “still in the … risk arena,” Urban Grid founder and CEO Frank DePew said in an interview with NPM.

“And we found that we were using some of that for capital expenditures for various things to keep projects on course, and deeper into the value chain,” said DePew adding that they "recently expanded its relationship with Crayhill."

Approximately, USD 200m of the new funding will be used for capital expenditures, while the remainder will be utilized for Urban Grid's development expenditures.

Urban Grid hopes to use the funds to bring their project pipeline to a point where they can begin construction as its presently in the midst of massive expansion push.

The company has 130 interconnection queue positions in 12 states and expects to bring 2 GWs “across the finish line” in 2022 and 2023. Urban Grid anticipates completing 2.5 GWs of new solar projects annually starting in 2024. That pace will see Urban Grid bring at least 8 GW to the grid over the next five years, the company said. According to NPM data, this includes 270 MW spread across three projects in PJM in Virginia.

“We generally wouldn't expect to begin construction in this line, we would move them into a project finance approach, when we began construction in earnest,” said DePew, “but we're going to use it for limited notice to proceed to get things to full notice to proceed to start the actual shovels in the ground, and for capital purchases, PPA deposits, those types of things.”

Until Urban Grid secured the funding line from Crayhill in 2019, the business, which opened its doors in 2010, had been fully financed by shareholders, DePew said. Urban Grid is still developing projects that were started with the company’s own capital but moved “the majority” into the Crayhill line, DePew said. The company attributes that with propelling its growth over the past two years.

And Urban Grid’s pipeline is building a head of steam.

The pipeline in question includes 12.7 GWs of solar power, 65% of which will have co-located storage facilities, and 3.7 GWAC total of both co-located and standalone storage projects in the works.