Structuring Private Equity Funds for Investment in Renewable Energy Projects: A New Financing Option

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


Conducted on Wednesday, June 14, 2017

Recorded event now available

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Program Materials

This CLE webinar will provide finance and energy counsel with the tools to structure a private equity fund dedicated to investment in renewable energy projects. The panel will discuss the advantages of the private equity model, and the ways in which energy private equity (EPE) funds are similar too and different from traditional private equity funds.

Description

The emerging trend of EPE funds is revolutionizing the renewable energy field. Energy sponsors are increasingly eschewing the traditional project finance structure, in which investment partners and financing are sought for each deal, in favor of a fund structure in which committed capital is deployed by the sponsor in accordance with a specified investment strategy. Private equity has proven to be a more efficient and cost effective way for renewable energy companies to obtain capital.

This trend can be seen as evidence of renewable energy maturing as an asset class. Since EPE funds are relatively new, their terms vary. However, there are some concerns common to EPE funds which distinguish them from traditional private equity funds. Provisions must be tailored for renewable energy investment regarding capital raising, investment strategy, carried interest and management fees, distribution structure, and investment period.

Counsel to renewable energy clients should have a working knowledge of private equity as a finance option, and private equity counsel should understand the structural nuances of an EPE fund.

Listen as our authoritative panel discusses the advantages of private equity over other financing options for renewable energy projects, and the similarities and differences between EPE and traditional private equity funds. The panel will also discuss the ways in which tax credits, regulatory compliance, and other aspects of renewable energy investment should be addressed in EPE fund documents.

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Outline

  1. Advantages of private equity over one-off renewalable energy investment structures
  2. Incorporating tax credits and other incentives
  3. Comparison of EPE to traditional funds
    1. Committed capital
    2. Investment strategy
    3. Carried interest and management fees
    4. Distribution structure
    5. Fundraising period
    6. Investment period and fund term
    7. Governance

Benefits

The panel will review these and other key issues:

  • How is private equity preferable to existing project finance structures in renewable energy?
  • What issues are unique to renewable energy as an asset class?
  • How might fundraising, investment strategy, partner consent, and investment period differ in an EPE fund?
  • Are current tax credits and other incentives still available in the EPE fund structure?

Faculty

McDonald, John
John J. McDonald

Partner
Troutman Sanders

Mr. McDonald counsels clients on a full range of corporate transactional matters, focusing on private equity and...  |  Read More

Justin Boose
Justin Boose

Partner
Troutman Sanders

Mr. Boose is a member of the firm's interdisciplinary Renewable Energy practice. He has considerable...  |  Read More

Adam C. Kobos
Adam C. Kobos

Partner
Troutman Sanders

Mr. Kobos focuses his practice on a wide array of tax matters for energy industry clients, including utilities,...  |  Read More

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