Debt Financing of Renewable Energy Projects and Transactions: Debt Markets, Deal Structures, Tax Equity, and More

Note: CPE credit is not offered on this program

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Wednesday, February 2, 2022

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Course Materials

This CLE webinar will guide renewable energy counsel and lenders on debt financing options and structuring considerations for energy projects and transactions. The panel will discuss critical issues relating to structuring debt financing transactions, the impact to tax equity partners, sector-specific liquidity constraints, trends in underwriting and syndication, the impact of potential tax credit extensions, and other key items to financing.

Description

Renewable energy projects face unique challenges in financing construction and operations. To match the demands of tax equity investments, secured debt structures can provide necessary capital but must be carefully crafted.

Debt financing is used for most renewable energy projects at some point in their life cycle, typically in the form of either (1) development loans to finance early stage project development work; (2) construction loans for equipment, parts, and contractors; or (3) permanent loans to recoup invested capital. Each presents a distinct set of challenges for developers, lenders, and investors.

Renewable energy counsel structuring these transactions must consider cash flow waterfall and diversion issues, transfer restrictions, foreclosures, project letters of credit, and other vital matters.

Listen as our panel discusses the challenges of structuring debt financing transactions, the impact to tax equity partners, sector-specific liquidity constraints, trends in underwriting and syndication, and other critical items for financing renewables.

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Outline

  1. Project finance basics
  2. Development loans
  3. Tax Equity structures
    1. Wind Tax Equity
    2. Solar Tax Equity
  4. Construction loans
  5. Tax Equity bridge loans
    1. Key Tax Equity CPs
    2. Interparty Arrangements
  6. Term loans
  7. Back-leverage loans
    1. Cash Diversion
    2. Transfer Restrictions
    3. Project LCs
  8. Private Placements
  9. Equipment Safe-Harbor Loans

Benefits

The panel will review these and other key issues:

  • What is the typical structure and what are the challenges for debt financing?
  • Collateral and critical issues stemming from tax partnership agreements
  • What are the key issues relating to cash flow?
  • What are the terms to negotiate concerning transfers of interest?
  • What are best practices and pitfalls to avoid for developers, lenders, and investors?

Faculty

Katz, Eli
Eli M. Katz

Partner
Latham & Watkins

Mr. Katz has extensive experience assisting clients on a wide range of complex transactions, including those in the...  |  Read More

Nazif, Omar
Omar Nazif

Partner
Latham & Watkins

Mr. Nazif represents financial institutions, sponsors, and developers in connection with all phases of the development...  |  Read More

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