Greenbacker completes $437 million financing for repowers in company milestone: first wind repowers to leverage the domestic content bonus
· Three projects are among the clean energy industry’s first to qualify for both the IRA’s investment tax credit and its domestic content adder; and also represent Greenbacker’s first executed sale-leaseback financing.
· Harnessing efficiency gains in newer technologies, Greenbacker has repowered 110 MW of its Midwestern wind fleet, including like-for-like equipment replacement at its largest Minnesota wind farm.
NEW YORK, April 24, 2024 (GLOBE NEWSWIRE) -- Greenbacker Renewable Energy Company LLC (“Greenbacker,” “GREC,” or the “Company”), a leading climate-focused investment manager and independent power producer, has secured $437 million in financing to repower two utility-scale wind energy assets in Iowa and complete a like-for-like equipment replacement at its largest wind farm in Minnesota (together, referred to as three “repowers”).
The repowers represent an energy transition milestone for Greenbacker. In addition to qualifying for the 30% investment tax credit (“ITC”), the projects are also among the clean energy industry’s first to utilize the additional 10% domestic content bonus newly created by the Inflation Reduction Act (“IRA”),^1 based on their use of components manufactured in the US, including new turbine blades, hubs, and nacelles.
“These repowers are among the first deals to utilize the ‘domestic content adder’ put in place under the IRA—a win for US manufacturing—and we are quite frankly thrilled to be an early success story demonstrating that the legislation is bolstering additional renewables investment,” said Armand G. Dehaney, Principal of Investments at Greenbacker. “With the newly redeveloped projects, we are proud to create green jobs, generate tax revenue, and continue to produce affordable renewable power for Iowa and Minnesota. We’re grateful to the landowners for their support and we look forward to working closely with them for years to come.”
The repowers also represent another milestone for Greenbacker: its first projects financed via sale-leaseback. The sale-leaseback structure provides Greenbacker greater upfront proceeds, while also creating a more efficient transaction that captures the benefits of both tax equity financing and back leverage lending in one transaction.
*Greenbacker repowers wind asset*
Greenbacker has repowered its Hawkeye wind energy project (38 MW, IA), replacing older turbines with new, more efficient components that have been sourced domestically.
To finance the repowers, Greenbacker collaborated with existing lender Bayerische Landesbank (“BayernLB”) to secure $81.5 million in construction bridge loan facilities and additionally secured long-term debt and tax equity financing from Huntington National Bank via sale-leasebacks totaling $355.7 million.
“This marks our first tax credit transaction with Huntington, with whom we’ve closed our first sale-leaseback financing,” Dehaney said. “We look forward to executing on our pipeline of projects across our growing wind fleet with partners like BayernLB and Huntington, who share our vision for a sustainable world.”
Huntington, one of the largest US regional banks and a deeply experienced lender in sale-leaseback financing, was the sole provider of the long-term sale and leaseback tax equity financing for the three wind farms.
“Huntington is thrilled to have had the opportunity to provide a creative financing solution for this portfolio of wind assets,” said Zachary Shiffman, Vice President of Renewable Energy Finance at the bank. “We enjoyed collaborating with the Greenbacker team to create a long-term lease facility that was able to unlock the full benefits of the IRA’s domestic content adder and we look forward to working with them on additional projects in the near future.”
The transaction represents Greenbacker’s most recent clean energy collaboration with long-time financing partner BayernLB. In 2019, the companies partnered on the original financing for a portfolio of wind projects that included the three assets that GREC recently repowered.
“BayernLB is very pleased that, after leading the original debt financing of these assets for Greenbacker in 2019, we are able to provide this innovative repowering bridge financing that serves to improve the output and extend the life of these clean energy assets,” said Andrew Kjoller, Executive Director at BayernLB. “Such opportunities fit squarely within our stated strategy to support our clients in financing the energy transition.”
Bedrock Renewables LLC (“Bedrock”) led the development of the repowers and supported the financings, on behalf of Greenbacker. The Bedrock management team has extensive experience in renewable project development and finance, and was instrumental in resolving concerns from landowners, local administrations, and project partners to help ensure this repower portfolio was a success.
“Bedrock is grateful for the opportunity to support Greenbacker’s repowering initiatives,” said Justin Fike, Partner at Bedrock. “We have a long history with the Greenbacker team and look forward to continuing to partner with them on future repower projects.”
Work was completed at Greenbacker’s largest wind farm in Minnesota—the 30 MW Community Wind South project—and at the 42.5 MW Elk wind asset in Iowa in late 2023. The repower at GREC’s 37.5 MW Hawkeye wind project in Iowa finished in the first quarter of 2024.
All three projects have entered commercial operation. It is estimated that the repowers will produce enough clean energy combined to power over 45,000 homes a year,^2 and abate nearly 347,000 metric tons of carbon (an amount equivalent to removing 77,000 gas-powered cars from the road).^3
Greenbacker remains committed to growing domestic clean energy deployment and furthering the energy transition. The Company’s fleet of clean energy projects have produced nearly 8.7 million MWh^4 of clean energy since 2016, in service of Greenbacker’s mission to empower a sustainable world. Greenbacker’s real assets have abated over 6.1 million metric tons of carbon^5 and support over 6,400 green jobs.^6
[Photos below to be included with press release and/or on Greenbacker’s website/socials]
*Repowering at Greenbacker wind energy project*
Repower work has been completed at Greenbacker’s Elk wind energy asset (43 MW, IA), extending the project’s useful life and ability to produce affordable renewable power.
*About Greenbacker Renewable Energy Company*
Greenbacker Renewable Energy Company LLC is a publicly reporting, non-traded limited liability sustainable infrastructure company that both acquires and manages income-producing renewable energy and other energy-related businesses, including solar and wind farms, and provides asset management services to other renewable energy investment vehicles. We seek to acquire and operate high-quality projects that sell clean power under long-term contracts to high-creditworthy counterparties such as utilities, municipalities, and corporations. We are long-term owner-operators, who strive to be good stewards of the land and responsible members of the communities in which we operate. Greenbacker conducts its asset management business through its wholly owned subsidiary, Greenbacker Capital Management, LLC, an SEC-registered investment adviser. We believe our focus on power production and asset management creates value that we can then pass on to our shareholders—while facilitating the transition toward a clean energy future. For more information, please visit https://greenbackercapital.com.
*About BayernLB*
As a streamlined specialised bank, BayernLB is a major investment lender to the Bavarian and German economy with branches in Europe and the USA. It is committed to progress. Its customers – companies, savings banks, institutional investors and the public sector – are at the heart of its sustainable approach. BayernLB is the central bank to the Bavarian savings banks and for decades has been a proven partner to these institutions and to other savings banks throughout Germany.
*About Bedrock Renewables LLC*
Bedrock is focused on creatively accelerating the deployment of wind energy in the United States through project repowers and greenfield project development. The Bedrock partners have extensive track records in renewable energy project development and financing. Bedrock was established to pursue niche projects requiring creative development and financing solutions unaddressed by larger industry players. The company is based in Golden, CO.
*Forward-Looking Statements*
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. Although Greenbacker believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. Greenbacker undertakes no obligation to update and forward-looking statement contained herein to conform to actual results or changes in its expectations.
*Greenbacker media contact*
Chris Larson
Media Communications
646.569.9532
c.larson@greenbackercapital.com
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^1SB Energy secures $2.4 billion for incentive-rich utility-scale solar projects, PV Magazine, Ryan Kennedy, November 30, 2023.
^2Frequently Asked Questions (FAQs) - U.S. Energy Information Administration (EIA)
^3 When compared with a similar amount of power generation from fossil fuels. Carbon abatement is calculated using the EPA Greenhouse Gas Equivalencies Calculator which uses the Avoided Emissions and generation Tool (AVERT) US national weighted average CO[2] marginal emission rate to convert reductions of kilowatt-hours into avoided units of carbon dioxide emissions.
^4 Data is as of December 31, 2023.
^5EPA Greenhouse Gas Equivalencies Calculator. December 31, 2023.
^6 Green jobs are calculated from the International Renewable Energy Agency's measurement that one megawatt of renewable power supports approximately four jobs. December 31, 2023.
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/e5330168-ba95-4f9e-9f98-2e4ae15ee7d7
https://www.globenewswire.com/NewsRoom/AttachmentNg/0210395e-5f24-4d8c-bb30-e3494e779a3a