CapDyn $1.32BN solar PV finance for projects located in CA. Acquired from FSLR. $450MM tax equity from GS, Samsung, WF and USB. $270MM fixed rate loan from Allianz, Hana and IFM.
CapDyn closed with Allianz $208MM long-term debt for Moapa Southern Paiute Solar in NV.
Alliance 10-year energy hedge for wind power project located in OK.
Forefront Solar former SUNE execs funding from Mitsui to pursue solar PV. 1MW community solar PV.
Heelstone Solar sells 194MW solar PV portfolio to Sammons Renewable. A $1.2BN fund, 3rd acquisition in clean energy. Marathon Capital advised the seller.
Duke acquires Invenergy 25MW Shoreham solar PV located in NY. 20-year PPA with LIPA.
$530MM debt finance for 1GW Hickory Run gas-fired power. Equity 50% Itochu, 30% KEPCO and 20% Siemens. 5-year revenue put. Kiewit is the EPC contractor.
(1) $380MM C+5-year term loan led by BAML, BNPP and CA. Pricing L+325bps. Includes MUFG, Development Bank of Japan, SMBC, ABN Amro, National Australia Bank, Shinhan Bank, LBBW, HSBC and Woori Bank.
(2) $80MM fixed rate loan from KB Asset Management.
(3) $70MM LCs.
$1.1BN gas-fired power project located in PA. Financing led by CIT, CA and GE EFS. Whitehall is FA. Bechtel is EPC.
Advanced Power $1.6BN Cricket Valley gas-fired power. Investors Blackrock, Chubu, NH Investment & Securities and TIAA-CREF.
NRG asset sale shortlisted bidders NEE, GIP and GIC. Others considering bids. DOE comprehensive strategy for long-term reliability and resilience. DOE points to inexpensive wind and solar power and natural gas. Grid modernization. There are about 35 tax equity investors in solar and wind, 50 to 60 banks and new equity investors every month. Leverage up to 80%. Pricing investment grade credits up to 200bps over LIBOR, below investment grade up to 350bps. Northern Pass preferred power transmission from Canada to NH. Will be substantially completed by 3Q20 and in service by the end of 2020. Global solar capacity will pass nuclear for the first time by 2022. Global solar demand will exceed 80 GW or grow 6-8% p.a.
Wind and solar currently power 8% of the world’s demand, could be 30% by 2035, a 7x increase in the size of the renewables market. Would cut coal’s contribution by 30%, almost obviate the need for new nuclear and eventually curtail gas.
Apex retained Cohn Reznick to find a buyer. Xcel and GIP shortlisted. Valued @ $400-500MM.
7 bidders for $4 BN NRG Energy assets. Lost $7 BN in 2 years. Including NEE, KKR, Blackstone, Borealis, John Hancock and GIP.
Enel secures $340MM tax equity provided by Allianz and MUFG. PPA with T-Mobile and Grand River Dam Authority. 300MW wind power.
Tool for mapping wind power in the US.
Solar PV industry could triple in size by 2022. In CA, solar energy is 10% of total generated energy.
Onyx Renewable raised $62.5 MM tax equity for 60 MW solar PV across 6 states. RBC created co-investment structure.
GE and Tesla install solar PV on 50 Home Depot stores and sell power to the host. Home Depot plans to get 135 MW of clean energy by 2020. Projects located in NY, NJ, CT, CA and DC. 6 projects will also get battery storage from Tesla.
Solar PV + Landfill Gas project.
LS Power finances 2 thermal power projects with a $415MM 7-year loan @ 325 bps. Banks BNP, CIT, DB, GE, ICBC, SunTrust, CoBank, DB and MUFG.
Calpine agreed to be acquired for $5.6 BN by a consortium of investors led by ECP.
Tax-exempt Energy Services Agreement to finance CHP installations at 60 Chicago buildings. No upfront cost and no economic risk for the city. Shares the realized electricity and natural gas savings. Sponsors Ameresco, Noresco, and Schneider Electric. Reduce annual energy usage by 18%. Piper Jaffray placement agent, BAML $12.2 MM 15-year tax-exempt debt @ 4.95%
Oil & Gas
Total acquired Maersk’s Oil & Gas business for $7.45 BN.
Oil prices are expected to decline in 2018.
Energy deals have picked up pace recently. Industry puts the worst of the slump behind it, although major oil companies like BP and Shell have tended to be sellers.
CEFC China in talks to acquire stake in Rosneft Russia oil & gas company.
Market reforms no evidence of adverse effects on the bond market. Less market participants and risk spread evenly. No material reduction in new issuances. US energy storage 565.5 MW. 22 companies own 45 storage systems in 12 states. 181.5 MW was added in 2016. Relatively less competition for acquisitions because utilities have a reduced appetite. Utilities have consumed a large amount of tax benefits over the last several years. Uncertainty on tax reform policy. Mezzanine debt attractive to replace equity but not debt. Common outside the US, limited opportunities inside the US. BHE cancels Salton Sea geothermal power project. Only 1 new geothermal project installed since 2000. Controlled Thermal plans to open new geothermal project in 2019 that extracts lithium from brine. Similar companies secured contracts from battery makers like Tesla but failed. SPAC Silver Run Acquisition Corporation invested $3.8 BN to combine midstream companies. Fossil fuels not burnt because of wind and solar helped avoid up to 12,700 premature deaths in the US between 2007 and 2015. US saved up to $220 BN. US likely spent up to $80 BN on subsidies for wind and solar. CIC (CIC.U) blank check company raised $350 MM in an IPO led by Citi, DB, and JPM. Grass clipping pellets from 100,000 acres owned by IL Department of Roads will be used to generate power for the public authority. Very large funds targeting infrastructure assets:
Energy outlook through 2040 shows rapidly falling cost of wind and solar crowding out other generation.
Google sells tax equity stake in 199MW wind power project to JPM and NYL.
Energy projects financed in the DCM through private placements.
Citi arranged $636.5 MM debt for 710 MW Texoma Wind.
Duke Energy mandates Citi to arrange $235 MM private placement for solar PV.
Sempra acquires 200MW contracted solar PV project from Recurrent Energy subsidiary of Southern. Sempra will build project and sell power to 4 utilities.
Utility preference to own the electrons they deliver as opposed to offer PPAs.
Sunrun mandates ING and SunTrust to arrange $300MM 7-year loan secured by portfolio of operating solar PV power projects.
SunPower and First Solar both exit 8Point3 yieldCo.
Engie mandates KeyBank for 22.1MW solar PV projects located in MA.
Longroad secures $100MM from sovereign funds. No investment at close, only at NTP.
1 GW gas-fired power project located in PA financed in the bank and DCM. $200MM fixed rate debt with Korean fixed rate lenders + $460MM C+5-year floating rate debt with BAML, BNP and CA.
MA propose including biomass in state RPS. Life-cycle of fuel to energy.
On-site generation capable of covering a power interruption valuable in terms of avoided losses and lower overall insurance costs.
Sustain WTE projects convert MSW to pellets secures $2.6 MM funding for demonstration project. Does not follow through to power generation.
BAML mandated by AES to sell 6 power projects in a 2-step auction process.
Oil & Gas
US natural gas storage is back at the 5-year average level.
PE firms recover investments through dividend recaps. EU PE firms recouped €4.2 BN in the leveraged loan market and €1.3 BN in the high yield bond market. Fundraising market “best its ever been”. $1 TN of dry powder. Overbuild in VT causing incumbent utilities to shut-down projects in peak periods. I Squared Capital raising $6.5 BN to invest in infrastructure assets. Global water treatment market is valued at $880 BN. Projected to grow at 3% to reach $940 BN by 2020. Rising floating rates make fixed rate debt attractive. Tenaska 150 MW solar PV mandated MS, MUFG and BNP. AES $1.475 BN power + storage. LS Power $460 MM portfolio finance. Capital Dynamics $208 MM financing.
WhiteWater Midstream $130MM C + 7-year project finance led by SMBC and MUFG. Pricing L + 200 bps. Finance includes loan + LCs.
Southern 148MW wind power project PPA with General Mills and GM.
Emera proposes delivering 1.2GW wind power from Canada to MA using 350-mile underwater cables.
AEP acquired $4.5 BN 2 GW wind power project + 350 mile transmission rather than offering PPA. Sought 10% ROE. Wind + Storage.
Deepwater Offshore Wind MA + Tesla Battery Storage. Allows load shifting.
Dominion acquires 4 solar PV power projects located in NC from Strata representing 20MW.
Duke Energy 35 MW solar PV power project located in NC gets regulatory approval.
Ecoplexus 16 MW solar PV power project located in NC gets approval. Funding from New Energy Capital of NH.
NTE Energy 2 GW solar PV and thermal power located in NC and OH. Whitehall and Credit Agricole leading debt and equity finance. Expect multiple offtakers.
Capital Dynamics 36 MW solar PV power project located in CA. Financing from MUFG and NordLB.
NC expects 2.6 GW solar PV over 3.5 years. PURPA contracts limited to 1MW, term 10 years.
Rockland Power PPA indexed to coal-fired power. Pricing L + 187.5pbs. MUFG leading finance. Refinances $216MM 7-year tenor term loan B @ L + 375bps and $47MM RCF.
Santee Cooper and SCEP cancel $7 BN nuclear power after spending $4.5 BN. Saved $11.4 BN in additional CAPEX and IDC.
OSU RFP for CHP issued May 2015 awarded July 2017. 44 bidders, 10 shortlisted, 3 finalists. Selected banks RBC and Barclays. Preferred EPC Burns & McDonald. Funding cost of debt 3.691%, OSU ROE 9.35%
CHP energy efficiency of 89.20%.
HELCO 30-year PPA at 21.9c/kWh. 21.5MW biomass power project fueled by eucalyptus trees.
ISG Energy developed 2nd generation FICFB technology. Improves fuel flow and energy cycling. Does not deal with the mercury content in ash.
UK has deployed over 40 EfW projects. Globally 15 EfW projects are in the process of arranging finance and 1 project in the US.
$116 MM 20 MW Hull Gasification EfW project located in the UK equity funding from Energy China and other Chinese investors.
GBP150 MM 600 TPD EfW project located in the UK. Merchant project. Ash collected and sent to landfill.
3,300 TPD EfW project located in MI generates 68MW. 90% sold to Basalt Infrastructure Fund, 10% DCO.
Santander led 2Q17 project finance lending following by SMBC and MUFG. Commonwealth Bank and Australia led 2Q17 infrastructure finance followed by NordLB and JPM. KKR launches $5BN Fund 3. US CVC deals decreased 18% from 1Q17. 209 deals. Funds increased 23% to 143 investors. Mostly CA and MA, where healthcare accounted for most investment. Oil & Gas M&A 2Q17 $37.01 BN, 3rd highest second quarter in 8 years. E&P dominated. PE investment in shale accounted for 21 deals worth $17 BN. US 2Q17 deal value $6.5 BN lowest in 2 years. 18 deals. Corporate deals $4.2 BN. Strategic deals $4.4 BN. 5 of 7 deals involved Canadian investors. EV/EBITA from 10x 2014 to 13.2x 2017. PE multiples 20x 2014 to 30x 2017. US attempt to dilute or roll-back EPA legislation. Success depends on congress action and activist reaction. CA and HI proposing 100% renewables by 2045. MA proposes 100% by 2050. CA 50% by 2030 and 100% by 2045. Jacobs Engineering acquires clean energy EPC Firm CH2M for $3.3 BN. 1,045 MW transmission line proposed to connect Northern Maine 630 MW wind power project with MA. Intersect Power 2 GW clean energy and storage secures $135 MM equity and LCs from Macquarie. Former Recurrent Energy developers. Carlyle secures 1 GW power portfolio. $297 MM financing from GE and Investec 7-year L + 325 bps. Alphabet developing energy storage project that stores electricity in molten salt and cooling anti-freeze. Releases energy by colliding hot and cold air in a steam turbine. Project size from a garage to a traditional power project. $40 BN market by 2024. 45 GW energy storage. JPM plans to invest $200BN in RE by 2025. Its already the largest tax equity investor. CT 30% RE by 2030. Reduce emissions 80% by 2050. Reduce energy waste by using CHP in commercial and industrial applications. Review Millstone nuclear project owned by Dominion. NYS issues $1.35 BN tax exempt senior and taxable subordinate debt.