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Renewable Energy Finance: Leeward Renewable closes its largest project financing to date - $615mn debt + tax equity package in the US

Mohit Kaul's picture
Founder, Enerdatics

Building Enerdatics. Leadership experience in a high growth SaaS company and secured a successful exit. A natural leader who cares about creating value for all stakeholders. Extensive experience...

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  • Dec 1, 2022
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Leeward Renewable Energy (LRE), based in Texas, secured a $420mn green loan primarily from MUFG, and a $195mn tax equity package from Wells Fargo. MUFG served as the structuring agent, coordinating lead arranger, and administrative agent for the financing, arranging commitments from eight financial institutions and Export Development Canada (EDC). The raised funds will be used to develop two utility-scale solar projects in the United States - the 196 MW Big Plain solar farm in Ohio, and the 100 MW Oak Trail facility in North Carolina. Construction on both projects started earlier this year, with the assets expected to be connected to the grid by mid-2023. Both solar farms are contracted to supply 100% of the output under long-term power purchase agreements to Verizon.

LRE, a portfolio company of private equity firm OMERS Infrastructure, operates a long-term contracted portfolio of 23 wind projects and one solar project totaling 2.3 GW of generation capacity. The assets are located primarily in the Midwest, West, and Texas markets. As of Jul’22, ~85% of the portfolio’s cashflows are contracted with investment grade offtakers, with a weighted average remaining contract life of 10 years. The company also has a 20 GW pipeline of wind, solar, and energy storage projects across the country. As per Enerdatics research, Leeward has raised $1.3bn since 2021 for the construction of nearly 1 GW of solar and wind projects in the US through non-recourse debt and tax equity.

In a recent credit review, Fitch ratings affirmed its Long-Term Issuer Default Rating (IDR) for LRE at 'BB-’ with a stable outlook, reflecting LRE's long-term contracted cash flows from a reasonably diversified portfolio of primarily wind projects in the US. Fitch estimates that the majority of the growth in LRE’s cash flows will come from solar projects in the development pipeline, assuming 1.2 GW operationalized across eight solar assets by 2024. Further, Fitch expects LRE to keep up the expansion of its solar portfolio beyond 2024, continuing its long-standing relationship with First Solar as an equipment supplier.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation. 

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