NineDot Energy Raises $225 Million in Equity Financing to Build and Operate Distributed Battery Energy Storage Projects

Rhea-AI Summary

NineDot Energy (NASDAQ: NINE) secures $225 million equity capital commitment from Manulife Investment Management and Carlyle, bringing its total capital base to approximately $400 million. The funding will support the development of community-scale battery energy storage systems in the New York City area, in line with New York Governor Hochul's sustainable energy roadmap. The company aims to achieve 400 megawatts of battery storage capacity in development by the end of 2026 while adhering to stringent safety requirements set by the New York City Fire Department.

Insights

Energy Sector Analyst

Manulife Investment Management's additional equity capital commitment of $225 million to NineDot Energy underscores the growing investor confidence in the renewable energy sector, particularly in community-scale battery energy storage systems (BESS). This move aligns with the broader industry trend of increasing capital flows into sustainable infrastructure as a response to climate change and the transition to renewable energy sources. The capital injection will likely bolster NineDot's position in the New York City metropolitan area, enhancing its ability to meet the state's ambitious energy storage targets.

The significance of this investment lies in its potential to accelerate the retirement of inefficient 'peaker' plants, which are typically fossil fuel-based power plants used during times of peak demand. The replacement of these plants with BESS can lead to a more stable and resilient grid and the reduction of carbon emissions, as evidenced by NineDot's estimated reduction of 420 tons of CO2e using the NYC DOB emissions methodology. This strategic move may also signal to the market that BESS is becoming an increasingly viable and profitable segment within the energy sector.

Financial Analyst

The financial commitment from two significant infrastructure investors, Manulife Investment Management and Carlyle, can be interpreted as a strong vote of confidence in NineDot Energy's business model and growth prospects. The combined capital base of approximately $400 million, when leveraged with existing project financings, positions NineDot for aggressive expansion and potential acquisitions. This could result in increased market share and influence within the energy storage industry.

For stakeholders, this investment may lead to enhanced financial stability and the potential for higher returns due to the increased capacity for project development. However, it is critical to monitor the execution of NineDot's project pipeline to ensure that the capital is utilized effectively and that projected growth targets are met. The addition of a new board member from Manulife Investment Management could bring strategic insights and governance that further drive value creation for the company and its investors.

Market Research Analyst

The renewable energy market, particularly in New York, is poised for growth, driven by supportive state policies and goals for zero-emission electricity by 2040. NineDot Energy's strategic focus on community-scale BESS is a key differentiator in this market, as it aligns with the state's roadmap for energy storage capacity. The company's success in securing substantial capital suggests a favorable market perception of BESS as a growth area.

Moreover, the geographical expansion and the potential for acquisitions as a result of the new equity funding may enable NineDot to capitalize on economies of scale and diversify its portfolio. This could create a competitive edge and set industry benchmarks for operational excellence and safety, particularly given the stringent requirements outlined by the FDNY. Stakeholders should consider the potential for NineDot to become a leader in the BESS space, which could have ripple effects across the energy storage market and influence peer strategies.

• Global investor Manulife Investment Management provides capital to support NineDot’s continued growth and pipeline execution
• Carlyle commits additional capital to NineDot, following an initial investment from December 2021

NEW YORK--(BUSINESS WIRE)-- NineDot Energy®, the leading developer of community-scale battery energy storage systems (BESS) in the New York City metropolitan area, today announced that it secured an additional $225 million equity capital commitment from Manulife Investment Management as well as Carlyle (NASDAQ: CG), NineDot’s existing institutional equity investor. Manulife Investment Management led the round with a $135 million commitment and concurrently acquired an equity interest. This new equity funding is expected to allow NineDot to advance its substantial project pipeline in the New York City area and to expand geographically as well as potentially through acquisitions. When combined with existing project financings from CIT, SMBC, and NY Green Bank, a division of the New York State Energy Research and Development Authority (NYSERDA), among others, NineDot has now secured a capital base of approximately $400 million.

NineDot Energy Northeast Bronx Battery Site (Photo: Business Wire)

“We are honored and excited to have Manulife Investment Management as a NineDot equity investor and partner,” said David Arfin, NineDot Energy CEO and co-founder. “From our first meeting it was clear that Manulife IM understood the importance of battery storage in modernizing the urban electric grid, making it cleaner, more resilient, more equitable, and less costly. Having Manulife Investment Management and Carlyle – two of the world’s leading infrastructure investors – in our corner will truly energize NineDot’s future.”

NineDot’s New York City battery storage projects support New York Governor Hochul’s nation-leading roadmap for 6,000 megawatts of energy storage capacity in New York State by 2030, on the path to 100% zero-emission electricity for the state by 2040. Battery storage is a critical part of New York’s sustainable energy infrastructure, enabling more renewable energy on the grid, accelerating the retirement of the dirtiest “peaker” plants, and making the grid more stable and resilient.

Recep Kendircioglu, Global Head of Infrastructure, Manulife Investment Management, said: “We have been believers in community-scale battery storage for a long time and are pleased to form a long-term equity partnership with NineDot Energy. We view NineDot as the leading BESS developer in a complex but attractive market. We look forward to supporting the team at NineDot as it executes on its growth pipeline in New York and scales its business.”

NineDot is on track to achieve its goal of having 400 megawatts of battery storage capacity in development by the end of 2026, while adhering to the most stringent safety requirements for any jurisdiction in the United States as specified by the New York City Fire Department (FDNY). NineDot’s initial battery storage site, located in the Pelham Gardens neighborhood of the Northeast Bronx, became operational last summer – a first-of-its-kind community-scale battery storage system in NYC, designed to provide power and resilience to the local grid at times of peak demand. In addition, NineDot has approximately 30 projects under construction across the New York metro area, with many more in development. A typical NineDot Energy 5-megawatt project is designed to power 5,000 New York City households for four hours on a peak summer day. From a decarbonization perspective, using the NYC Department of Buildings (DOB) emissions methodology, if a NineDot site were operating in 2022 it would be estimated to have reduced local greenhouse gas emissions by 420 tons of CO₂e (carbon dioxide equivalent).

“When we first backed NineDot in 2021, we recognized they had a unique strategy to support New York’s energy transition. Over the past two years we’ve worked closely with them as they’ve experienced tremendous success building out their platform and project pipeline. We look forward to partnering with Manulife Investment Management, providing further support to the NineDot team as they pursue their ambitious goals,” said Pooja Goyal, Chief Investment Officer of Carlyle’s Infrastructure Group.

As part of this transaction, Christopher McKenzie, a Managing Director on Manulife Investment Management’s Infrastructure team, will join NineDot’s Board of Directors.

About NineDot Energy

NineDot Energy is the leading community-scale, battery storage developer and operator in the New York City metropolitan region. We create innovative urban energy solutions that support a more resilient grid, deliver economic savings, reduce carbon emissions, and improve environmental equity. Many of our battery storage locations are designed to include solar systems and electric vehicle supply equipment (EVSE) capabilities as well. NineDot Energy’s name derives from the classic mathematical puzzle for sparking out-of-the-box solutions. We are based in Brooklyn, New York. Learn more at nine.energy.

About Carlyle

Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across three business segments: Global Private Equity, Global Credit and Global Investment Solutions. With $382 billion of assets under management as of September 30, 2023, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. Carlyle employs more than 2,200 people in 28 offices across four continents.

About Manulife Investment Management

Manulife Investment Management is the global brand for the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our extensive capabilities in public and private markets are strengthened by an investment footprint that spans 19 geographies. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We’re committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240110676731/en/

NineDot Energy Media Contact

Karen Alter, 650-383-8552, Karen@nine.energy

Carlyle Media Contact

Brittany Berliner, 212-813-4839, Brittany.Berliner@carlyle.com

Manulife IM Media Contact

Elizabeth Bartlett, 857-210-2286, Elizabeth_bartlett@manulife.com

Source: NineDot Energy

FAQ

What is the latest equity capital commitment secured by NineDot Energy?

NineDot Energy has secured an additional $225 million equity capital commitment from Manulife Investment Management and Carlyle, bringing its total capital base to approximately $400 million.

What are the goals of NineDot Energy in terms of battery storage capacity development?

NineDot Energy aims to achieve 400 megawatts of battery storage capacity in development by the end of 2026.

What are the safety requirements that NineDot Energy adheres to for its battery storage systems?

NineDot Energy adheres to the most stringent safety requirements for any jurisdiction in the United States as specified by the New York City Fire Department (FDNY).

Who led the latest equity funding round for NineDot Energy?

Manulife Investment Management led the round with a $135 million commitment and concurrently acquired an equity interest.

How does NineDot Energy's projects support New York Governor Hochul's sustainable energy roadmap?

NineDot Energy's New York City battery storage projects support New York Governor Hochul's nation-leading roadmap for 6,000 megawatts of energy storage capacity in New York State by 2030.