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Non-developer sources of financing

Non-developer Financing Sources

Moderator: Mike Hayes, Global Leader of Renewables, KPMG in Ireland.

Panelists: Mark Friedland, Chief Legal and Compliance Officer, Orion Energy Partners, L.P.; Bernardo Goarmon, Chief Financial Officer, EDP North America; Ignacio Ruiz Hens, Head of Investments & Strategy, Americas at Cubico Sustainable Investments.

Non-developer financing sources are leveraging their varied strengths in a competitive environment.
Hens checked off a number of advantages for renewables investors like his firm, Cubico. Scale, as well as having capital lined up without the need to fundraise, are important for being competitive for an RFP. He added that his firm is not dependent on stock performance, which also helps in buying assets.

Hens also said that in this sophisticated and transparent market with many advisors, investors need to take a more aggressive approach.

"When the developer comes up with a new asset, they will end up talking to everybody," he said. "It's very easy to find the assets, but to get to the assets, you have a have a competitive edge."

Hayes added that he's seen equity investors trying to connect with developers at a much earlier stage, and even entering into arrangements to take on development risk.

Hens agreed. "Some investors are absolutely return-driven. So to keep certain numbers, you end up having to take a little risk."

Some investors may not receive the performance they're looking for in return for risk taken.
Hayes asked if investors are starting to take unnecessary risk when pricing transactions. While the panelists didn't think so, they did provide some caution.

The US is slowly considering offshore wind.
It's still too early to say if the US will host a healthy offshore wind market, Goarmon said. EDP, which has several interesting wind projects in Europe and the UK, is taking an initial step in the US.

"We are not first movers by any means, but I was 3 or 4 years in denial, that no way offshore will play a role in this country," said. "And you know what? It is happening."

However, the offshore wind market in the US is likely to remain challenged .

The benefit of tax reform: certainty.

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