RADIAL POWER SECURES $80 MILLION IN TAX EQUITY FINANCING FROM BANK OF AMERICA

Rhea-AI Summary

Radial Power (RPWR) secures $80 million in tax equity financing from Bank of America to support 96 MW of C&I and community solar projects across nine states

Insights

Financial Analyst

The $80 million tax equity financing obtained by Radial Power from Bank of America signifies a substantial investment in the renewable energy sector, specifically in distributed generation projects. This financial move is pivotal as it backs a significant expansion, with an estimated 96 MW of C&I and community solar projects. The capital injection will likely enhance Radial Power's ability to deliver on its project pipeline through late 2024, potentially increasing its market share in the renewable energy domain.

From a financial perspective, this transaction is noteworthy due to the involvement of Bank of America, a substantial player in renewable energy financing. Their commitment of $1.5 trillion in sustainable finance by 2030 may provide a ripple effect of confidence and stability within the market. This deal could signal to other investors the growing viability and profitability of sustainable energy projects, potentially leading to increased investment and competition in the sector.

For stakeholders, including investors and customers, this move is aligned with the growing emphasis on Environmental, Social and Governance (ESG) criteria. As companies increasingly seek to meet sustainability goals, Radial Power's expansion could meet this demand, providing both environmental and economic benefits. However, the long-term success of this investment will depend on the continued growth of the renewable energy market, regulatory support and technological advancements.

Energy Sector Analyst

Radial Power's engagement in tax equity financing with Bank of America reflects a strategic move within the energy sector, tapping into the growing distributed generation niche. Distributed generation, particularly solar projects, is a key component in the transition to a more decentralized and resilient energy grid. The financing will not only support the development of these projects but also underscores the potential profitability of investing in underutilized real estate for energy production.

The deal's impact on the broader energy market could be significant. By increasing the number of distributed generation assets, Radial Power is contributing to the diversification of the energy supply and potentially reducing dependency on traditional energy sources. This shift is crucial for the long-term stability and sustainability of the energy sector. Moreover, the investment may lead to technological innovations and cost reductions in solar technologies, further catalyzing the growth of the industry.

It is important to note that while the deal is a positive development for Radial Power and its stakeholders, the distributed generation market is subject to regulatory changes and market dynamics that could affect the future performance of these investments. Stakeholders should monitor policy developments and market trends closely to assess the ongoing viability of these projects.

Sustainability Expert

The collaboration between Radial Power and Bank of America highlights a strategic alignment with sustainability and ESG objectives that are becoming increasingly central to business operations and investment decisions. The focus on low-cost, low-carbon clean energy solutions is indicative of the market's shift towards sustainable practices and the recognition of renewable energy as a viable and necessary component of future energy systems.

For communities and businesses, the benefits of this investment are twofold: it supports their sustainability goals and provides potential cost savings through the use of clean energy. This is particularly relevant as stakeholders are actively seeking ways to reduce carbon footprints and adhere to stricter environmental regulations. The societal impact of these projects could be substantial, contributing to a reduction in greenhouse gas emissions and the promotion of renewable energy adoption.

However, the long-term impact of such investments will be contingent on consistent policy support and the evolution of energy markets. As the renewable sector matures, Radial Power will need to navigate challenges such as market saturation, technological disruption and shifts in consumer behavior. Stakeholders should weigh these factors when considering the implications of this investment on their sustainability strategies and financial portfolios.

The capital will support an estimated 96 MW of C&I and community solar projects spanning more than nine states

Represents Radial Power's inaugural tax equity financing transaction

NEW YORK, Dec. 20, 2023 /PRNewswire/ -- Radial Power announced today that it has closed on $80 million in tax equity financing from Bank of America to support the company's pipeline of distributed generation projects through late 2024, encompassing both asset and portfolio-level turn-key integrated commercial & industrial (C&I) and community solar solutions. 

This tax equity capital raise, alongside backleverage, will help fund the development and installation of an estimated 96 MW of C&I and community solar projects, across more than nine states and for multiple anchor real estate customers.

"This strategic investment will support Radial Power's robust pipeline of low-cost, low-carbon clean energy solutions that enable offtakers to meet their ESG and sustainability goals," said John M. King, Chief Financial Officer of Radial Power. "Our national portfolio of best-in-class distributed generation projects is unlocking revenues from underutilized real estate, delivering value to our customers, and  accelerating a reliable U.S. energy transition."

This deal marks the inaugural tax equity financing Radial Power has closed with Bank of America, a leader in renewable energy tax equity financing with a portfolio of approximately $13.5 billion at the end of 2022.  Bank of America's investments have contributed to the development of approximately 40.7 gigawatts of total installed renewable wind and solar energy capacity in the U.S.  In addition to utility scale renewable projects, Bank of America has also provided financing for distributed solar generation for residential and commercial/industrial customers and for electric vehicles, and has a portfolio comprised of 176 wind farms, 59 solar farms and over 160,000 rooftop installations. 

"We are proud to support Radial Power in this latest milestone.  The tax equity transaction underscores Bank of America's commitment to mobilize and deploy $1.5 trillion in sustainable finance capital by 2030, and to support the scalable and affordable delivery of clean, local power to communities, businesses and individuals," said Danielle King, Director in the Global Sustainable Finance Group at Bank of America.

Latham & Watkins acted as legal counsel to Radial and Milbank to Bank of America.

About Radial Power
Radial Power is a privately-owned, developer-owner-operator of distributed clean energy assets across large real estate portfolios. Founded in 2022, Radial Power assists owners of large real estate portfolios develop programs across multiple U.S. state and utility regulatory jurisdictions to achieve their ESG, climate, and renewable energy objectives. Radial Power provides its partners and customers with both asset and portfolio-level turn-key integrated commercial & industrial solutions, including developing, owning, and operating photovoltaic solar, BESS, and EV charging solutions.  Radial Power is jointly owned by investment affiliates of energyRe and Lotus Infrastructure Partners and has offices in Houston and New York.  For more information, visit www.radialpower.com

About Bank of America 
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 69 million consumer and small business clients with approximately 3,900 retail financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 57 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock is listed on the New York Stock Exchange (NYSE: BAC).

View original content:https://www.prnewswire.com/news-releases/radial-power-secures-80-million-in-tax-equity-financing-from-bank-of-america-302019649.html

SOURCE Radial Power

FAQ

What is the source of Radial Power's $80 million financing?

Radial Power secured $80 million in tax equity financing from Bank of America.

How many MW of projects will the financing support?

The financing will support an estimated 96 MW of C&I and community solar projects across more than nine states.

What type of projects will be funded by the financing?

The financing will fund the development and installation of C&I and community solar projects.

Who is Radial Power's Chief Financial Officer?

John M. King is the Chief Financial Officer of Radial Power.

Who provided legal counsel to Radial Power and Bank of America?

Latham & Watkins acted as legal counsel to Radial Power, and Milbank to Bank of America.