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

Description

The emerging trend of EPE funds is revolutionizing the renewable energy field. Energy sponsors are increasingly eschewing the traditional project finance structure, where sponsors seek investment partners and financing for each deal, in favor of a fund structure where the sponsor deploys committed capital according to a specified investment strategy. Private equity has proven to be more efficient and cost-effective for renewable energy companies seeking 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 how tax credits, regulatory compliance, and other aspects of renewable energy investment to address in EPE fund documents.