29 December '09
9:20 AM UTC
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Horizon Wind Energy Secures $90M Financing from JPM Capital

Horizon Wind Energy, the U.S. unit of Portuguese clean energy company EDP Renováveis (EDPR), has secured a $90 million equity financing from Dallas-based JPM Capital for an undisclosed stake in Horizon’s 101 megawatts Lost Lakes Wind Farm, which went live this month in Dickinson County, Iowa. Read More »

3 September '09
1:30 PM UTC
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Horizon Wind Energy Secures $100M Financing

picture-2Horizon Wind Energy, the U.S. unit of Portuguese clean energy company EDP Renováveis (EDPR), has secured $101.9 million of institutional equity financing from JPM Capital to support the development of its 100.5-megawatt Rail Splitter wind farm in central Illinois.

The transaction is interesting because it is structured around the stimulus-funded direct cash grant program implemented by the Department of Energy and the Treasury Department to support the construction of clean energy assets.

In exchange for the financing, JPM Capital, of Frisco, Texas, will get a stake in Rail Splitter as well as access to the cash grants that the farm is expected to receive in lieu of tax credits. In short, JPM not only secures a lump of cash backed by the U.S. government — you don’t do better than that in terms of guarantees — but also earns a share of the revenues generated over time from Rail Splitter power sales.

Rail Splitter was installed in June and is located north of Springfield, the state capital.

On Tuesday
, Treasury and the DOE released — see for the press release — the first batch of these much anticipated grants, some $502 million out of an expected $3 billion. The big winner was Spain’s Iberdrola, which got some $236 million for wind farms in Texas, Oregon and Minnesota and an additional $59 million for a Pennsylvania wind project. Horizon got $47.7 million for its 97-megawatt Wheat Field wind farm in Oregon.

15 July '09
8:20 AM UTC
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Details Emerge on Gov. Cash Grants

Last week the Treasury and Energy Departments released details on much awaited grant financing, which along with production and investment tax credits, are expected to help revive a sector hit hard by the economic crisis. Words of the direct cash grant program first began circulating last winter, shortly after the passage of the $740 billion stimulus package. At the time financing in the clean energy space across the board — bank loans, venture capital and private equity — had all but shut down. Although the funding environment has improved, over the long-term clean energy developers are counting on an ongoing public/private partnership to support the Obama administration’s ambitious goals of doubling clean energy production over the next three years.

Regarding the energy grants, market research firm New Energy Finance predicts a spike in applications from cash hungry investors. In a note released yesterday, the firm writes:

The rules themselves appear to represent nearly everything the industry had sought. The federal government’s definition of capital expenditures related to developing a clean energy project are simple and fairly logical, based on existing tax code. Developers backed by non-profit entities such as pension funds may qualify to receive the grant, provided they create the right legal structures. The government will not seek to “claw back” the grants too aggressively unless ownership of the project transfers to a non-qualified entity under the law. The grants are to be issued 60 days after a project is commissioned.

and adds:

Exactly how many projects will apply for the grants is unclear. The Energy Department last week estimated 5,000 applications are possible and that the cost to taxpayers would be aboutUSD 3bn. The first estimate is probably too high and the second is certainly too low as it would result in just 5GW of new nameplate capacity in the US. Given that 8.5GW of wind alone were installed last year that would be a disappointment to the Obama administration which hopes to double clean energy capacity over three years by adding roughly 25GW.

The initial amount of $3 billion is just a start that could peak to $10 billion. Also, important to note that investor will only be able to apply to a single government funding option: cash grant, investment tax credits or production tax credits.

9 July '09
6:18 PM UTC
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Treasury Cash Grants Could Reach Developers in the Fall

The Treasury Department has details on its much awaited clean energy financing program — (scroll down to see a copy of the application). The funding is part of the $740 billion green-focused stimulus package signed into law by President Obama earlier this year.

The clean tech sector has been counting on these government funds to provide liquidity to a sector where funding across the board, both bank loans and venture capital, dried up when the economy tanked.

Treasury only released details on the $3 billion direct cash grants. The program allows clean energy developers to tap government monies to support 10-30 percent of a project cost if these are either under construction or already in service. The funding window is scheduled to stay open for three years.

Treasury will start accepting applications from developers at the end of the month and could start allocating funds in early fall.

These direct cash grants are only one of three  government financing options.  The others are Investment Tax Credits (ITC) and Production Tax Credits (PTC), which will also be available for the next three years.  However, developers will only be able to apply to a single funding source over that time period.