Birch Creek Energy Completes Financing for 49MW Earp Solar

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Insights

Birch Creek Energy's completion of financing and commencement of operations for the 49MW Earp Solar project is indeed a significant milestone for the company. This project's successful financing and launch can be viewed as a strong indicator of Birch Creek's ability to manage large-scale renewable projects, which is important for their long-term growth strategy.

From a financial perspective, the involvement of tax equity from Foss & Co. and debt financing from West Town Bank & Trust is noteworthy. This structure likely optimized the project's economics, making it financially viable and attractive. The use of an inverted lease structure, mentioned by Foss & Company, is a financing arrangement where the lease payments are made by the tax equity investor, which can enhance cash flow efficiency and provide better financial returns for the project owners.

The completion of Earp Solar also suggests that Birch Creek is effectively executing its strategy to establish itself as an independent power producer (IPP). For stakeholders, particularly retail investors, this is a positive signal as it exhibits the company's potential to generate stable revenue streams from operational renewable assets. Furthermore, the announcement of additional projects totaling 342MW being in the pipeline provides a forward-looking growth narrative that can attract long-term investment.

The immediate impact on Birch Creek's financials will be seen through revenue generated from power sales to Ameren Illinois. Given that Earp Solar can power over 7,300 homes, the revenue stream is likely to be substantial. However, investors should also consider potential risks such as regulatory changes, operational hiccups and market fluctuations in renewable energy credits.

The operationalization of Earp Solar marks a significant advancement in Birch Creek Energy's renewable strategy. The 49MWdc capacity of Earp Solar and its ability to power over 7,300 homes positions it as a substantial contributor to Illinois's renewable energy portfolio. This is particularly important as states push for greater renewable energy adoption to meet environmental goals.

Additionally, the involvement of multiple financial partners, including Foss & Co., West Town Bank & Trust and Pathward®, demonstrates strong confidence in Birch Creek's project viability and operational competence. This multi-faceted financing approach is important for large-scale renewable projects, where financial stability can make or break the project timelines and success.

For Birch Creek, the success of Earp Solar sets a critical precedent for its future projects. The ability to replicate this success across the remaining 342MW of projects could significantly bolster the company's position within the renewable energy sector. However, it's essential to monitor the project's performance over time to ensure it meets expected energy output and operational efficiency.

The Earp Solar project also illustrates the broader industry trend of leveraging innovative financing structures to make large-scale renewable projects viable. Such financial innovations are vital in reducing the overall cost of renewable projects and accelerating the transition to clean energy.

06/24/2024 - 08:00 AM

Earp Solar Becomes First Fully Financed and Operational Asset for Birch IPP

ST. LOUIS, June 24, 2024 /PRNewswire-PRWeb/ -- Birch Creek Energy, LLC ("Birch Creek"), a St. Louis based renewable energy company, announced the completion of financing and full operation of Earp Solar, a 47MW utility scale solar project based in Illinois. Earp Solar represents the first project to become fully financed and operational in Birch Creek's independent power producer entity (the "IPP") and is the first of several which are slated to come on line this year.

"Bringing Earp Solar to completion is a transformational event for Birch Creek," said Dan Siegel, CEO of Birch Creek. "We announced our IPP strategy mid 2023, and since then have worked aggressively to complete the construction and financing of 6 projects in MISO territory totaling 342MW. Earp Solar represents the first of these projects and we are grateful to our partners who helped get us here."

Tax equity was arranged through Foss & Co., permanent debt was provided by West Town Bank & Trust, and construction capital was underwritten and funded by Pathward®, N.A.

"Earp Solar exemplifies Foss & Company's commitment to driving positive change in the renewable energy landscape. Our tax equity investment in this exciting project used an inverted lease structure which optimized economics for all involved," stated Bryen Alperin, Partner and Managing Director, Foss & Company. "This marks our second successful deal with Birch Creek and our third deal with their project finance lead. We are thrilled to be a part of the Earp Solar project, and look forward to many future deals with the Birch Creek team."

"We would like to sincerely thank all of our partners for supporting the financing of our first IPP asset," added Max Whitacre, EVP of Project Finance for Birch Creek. "We are thrilled to have achieved this milestone and look forward to continued financings through these relationships as we build out our IPP this year and beyond."

Earp Solar is a 49MWdc solar project based in Warren County, Illinois. The project is sited on 229 acres and connects to Ameren Illinois. Earp Solar generates enough clean electricity to power over 7,300 homes.

About Birch Creek Energy
Birch Creek Energy, a utility scale solar development platform, develops, finances and owns utility scale solar and storage projects in the United States. Since 2019, Birch Creek Energy has developed 1.7 gigawatts (GW) of solar projects and has a portfolio of over 14.2 gigawatts (GW) of utility scale solar and storage projects in various stages of development and operation across MISO, PJM, ERCOT and the Southeast. Birch Creek Energy has 52 employees and is based in St. Louis, Missouri. For more information, visit www.birchcreekenergy.com.

About Foss & Company
Founded in 1983, Foss & Company is a national tax equity investor and fund sponsor that has deployed over $8 billion in tax equity on behalf of insurance, banking, and other large corporate clients into historic rehabilitation projects, renewable energy and advanced energy production facilities. Foss & Company is a full-service advisor with proven expertise in helping our partners navigate the world of tax equity investments. For additional information, visit www.fossandco.com.

About Pathward®
Pathward®, N.A., a national bank, is a subsidiary of Pathward Financial, Inc. (Nasdaq: CASH). Pathward is a U.S.-based financial empowerment company driven by its purpose to power financial inclusion. Pathward strives to increase financial availability, choice and opportunity across our Banking as a Service and Commercial Finance business lines. The strategic business lines provide end-to-end support to individuals and businesses. Learn more at Pathward.com.

About West Town Bank & Trust
West Town Bank & Trust is a dedicated financing partner for solar energy, specializing in the efficient application of the USDA's Rural Energy for America Program. With its specialized renewable energy team, West Town streamlines access to development capital with creative financing solutions. West Town has authorized over $1 billion in solar financing since 2016, facilitating industry innovation, the growth of clean energy, and rural economic development. The bank is chartered in Illinois with headquarters in Raleigh, North Carolina. For more information about West Town Bank & Trust, visit www.westtownbank.com.