First deal closed with Longroad Energy; The new product will be key to meeting the bank’s environmental goals and meeting growing customer needs.
US Bancorp Community Development Corporation (USBCDC) — one of the most active investors in renewable energy in the country — launched a debt product and closed its first loan. It’s with Longroad Energy on Three Corners Solar, a $200 million, 152-megawatt solar project in Kennebec County, Maine. The deal, which also includes a tax share, marks an important milestone in expanding the US bank’s commitment to the environment and to supporting its customers.
“We believe everyone has a role to play in creating a sustainable future and tackling climate change, and we’re excited about all the ways this will expand our ability to do just that,” said Darren Van’t Hof, Managing Director of Environmental Finance for USBCDC. “The renewable energy market continues to grow and this new product will help us meet customer and industry needs and meet the environmental commitments made by US Bank.”
USBCDC, the US Bank’s tax credit and community investment division, invests renewable energy taxpayer capital in projects that help bring clean energy options to our nation’s homes, cities and businesses through wind, solar and other renewable energy projects. Since 2008, its investments have totaled over $15 billion in taxable capital and total renewable generation capacity of 20.21 gigawatts – enough to power more than 3,800 homes. The addition of credit means these numbers will only grow.
“Our new project finance debt financing platform is a perfect example of how we can bring a US bank together to deepen our relationships with new and existing customers,” said Bill Gallagher, director of environmental project finance lending at USBCDC. “Not only will this help us achieve our own commitment, but it will also create opportunities to support clients across the bank – from utilities to developers – who are making their own transition to a greener economy.”
USBCDC has completed a $100 million loan and invested $80 million in tax equity in the Three Corners Solar project. It is the bank’s fourth equity deal with Longroad and first with debt.
“Execution, safety and quality are very important to Longroad. US Bank has long been Longroad’s trusted tax participation partner for its best-in-class tax participation products and solutions,” said Tait Nielsen, VP of Project Finance at Longroad Energy. “With the support of US Bank, now on both the tax and credit side, Longroad is able to raise financing more efficiently and with greater confidence. We look forward to continuing and expanding our longstanding relationship with US Bank.” ”
Rod Granados, USBCDC account manager, said Three Corners is a great first project to start with. New England is a strong solar energy market and the utility-scale project has a long-term power purchase agreement with EDF Energy Services, LLC. “All technology for this project is also domestically sourced, avoiding some of the recent supply chain issues and delays experienced by the industry,” Granados said. Upon completion, which is expected in late 2023 or early 2024, it will be the largest solar project in Maine.
The new environmental project financing platform is also an important component in fulfilling the environmental commitments US Bank made. Last November, it set a green funding goal of $50 billion by 2030 – to advance the transition to a low-carbon economy by funding more customers and projects that make a positive impact on the environment. It also has a goal of achieving net-zero greenhouse gas emissions by 2050.