CleanCapital, CarVal gobble up KDC solar portfolio, ask for seconds

We’ve written before about the “wall of money” looking for solar projects. As more and more investors get interested in the stable long-term returns on contracted solar assets, competition gets more fierce, which is forcing business model evolution.

Enter CleanCapital, a company which searches out what it considers quality projects and bundles these into portfolios for investors. Yesterday the company grew its assets under ownership 65% with the acquisition of a portfolio of 15 operating New Jersey solar projects from KDC Solar.

This is the fourth in a series of acquisitions made through CleanCapital’s $250 million investment vehicle with CarVal investors, as part of an aggregation strategy that the two companies launched last year. Buying the 75 MW “Olympic” portfolio means the company now owns and operates a total of 180 MW of renewable energy assets and holds $465 million in assets under management.

The 15 projects in the portfolio range in capacity from 157 kW to 10 MW, with an average capacity of 5 WM and off-takers including Fortune 100 companies as well as local government bodies.

Aiming for securitization

CleanCapital says that this solidifies its place as “one of the leading owner-operators of C&I solar in the United States”, and the company has no plans to stop there. In the same announcement, the company revealed that it and funds managed by CarVal investors have closed on a $300 million debt warehouse facility.

In addition to this facility, CleanCapital plans to use the revenues from its portfolios of operating assets to fund more acquisitions of small-scale renewables, with the aim of building portfolios that it can bundle into asset-backed securities (securitize).

Securitization has become an increasingly popular way to raise money with portfolios of distributed solar assets. Mercom Capital reports that over $4 billion has been raised through solar securitization deals since 2013, including nearly $600 million in the first half of 2019 alone.

“The debt warehouse facility grants us access to a new type of financing, bolstering our overall capital capacity to acquire distributed solar and energy storage projects,” explains Matt Eastwick, chief investment officer at CleanCapital. “This seminal financing takes us a step closer to our long-term vision of securitization, which is key to our mission to drive institutional investment in clean energy.”