Just two months after the receivership and takeover of Silicon Valley Bank by the Federal Deposit Insurance Corporation, now under the ownership of First Citizens Bank, SVB has reemerged as a lender to the solar development market.
The lender closed a $203 million debt financing to support construction of a 100 MW multi-state distributed generation solar portfolio of Pivot Energy, a Denver-based community, commercial and industrial solar development company.
Tax investor Foss & Company is committing an initial tax equity round in the portfolio, which comprises 35 community solar and C&I projects planned to reach commercial operation (COD) between mid-2023 and mid-2024.
Community solar subscribers in the portfolio include municipalities, healthcare facilities, food service, and retail companies, as well as 8,000 low-to-moderate income (LMI) residential households.
With community solar projects in Colorado, Minnesota, Illinois, New York, Hawaii, Maryland, and California, the portfolio represents what the company said is one of the most extensive LMI solar portfolios developed to date in terms of diversity and geographic reach.
SunCentral, a community solar subscriber management and acquisition platform, will manage the community solar portfolio through operations.
The debt transaction led by SVB includes a construction loan, tax equity bridge loan, and term loan. SVB led the financing as coordinating lead arranger (CLA) and sole bookrunner. Other lenders committed to the DG solar portfolio include J.P. Morgan, National Bank of Canada, Bank United, Cadence and Comerica. The debt facility also represents J.P. Morgan’s first debt issuance to the community solar market.
The SVB financing represents Pivot’s second debt syndication closed with the SVB-led lender group. In 2022, the developer raised $190 million in credit to finance a 90 MW community solar portfolio in New York, Illinois, Colorado, Minnesota, California, and New Jersey.
Bret Labadie, chief financial officer for Pivot Energy, told pv magazine USA that for the new financing, Pivot had been in the market since Q4 2022 and were set to close the second debt facility with Silicon Valley Bank in March 2023, but the federal takeover of the commercial bank put the financing process on hold.
“Each of the banks in this syndicate worked with Pivot and we were able to navigate the temporary uncertainty to retain the initial terms of the deal,” Labadie said. “It’s a testament to the leadership from each of the parties that we were able to stay the course and see this loan through.”
“We are pleased to have led and structured this portfolio of solar projects across 35 sites in 7 key markets,” said Bret Turner, head of project finance, Silicon Valley Bank. “We appreciate the confidence and trust placed in the team at SVB to continue moving this asset class forward.”
When combined with the Foss tax equity contribution, the total financing package enables Pivot to construct, operate, and own the multi-year and multi-state portfolio.
“This initiative will expand access to clean, affordable energy for small businesses and low-income households, reinforcing our commitment to invest in tax equity within under-served market segments,” said Bryen Alperin, managing director at Foss & Company.
CohnReznick Capital was Pivot’s financial advisor on the transaction. Stoel Rives was counsel to the company. Milbank represented SVB while Winthrop & Weinstine represented Foss.
The financing is Pivot’s second project development portfolio to be built, owned, and operated since the company’s June 2021 acquisition by Energy Capital Partners (ECP).
Safe asset class
Silicon Valley Bank, the 16th largest U.S. commercial bank, was shuttered on March 9, 2023 and placed into receivership by the FDIC. After parent company SVB Financial filed for bankruptcy on March 17, First Citizens Bank entered an agreement on March 27 to acquire Silicon Valley Bridge Bank, effectively resuming the corporate debt financing platform of the bank.
SVB extended $56 billion of venture capital financing to climate-technology focused companies in 2021. Several solar development executives told pv magazine USA for the April print edition of pv magazine that the bank’s demise was not expected to create widespread challenges to development clients in the community and commercial and industrial (C&I) solar market, as well as utility scale solar companies.
“The biggest threat to the pace of project development is definitely not available capital, it’s the significant and ever-increasing pushback on project siting and land use at the local level,” said Mark Richardson, chief executive officer of U.S. Light Energy, a community solar developer in upstate New York, told pv magazine USA. “We are not even close to operating at full speed, because of local opposition, not because of a lack of financing,” he said.
(Read more: “Solar and the SVB banking crisis“)
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