Menu

Renewable Energy Facilities Debt Refinancing

Renewables & Energy

Infrastructure Group

George K. Baum & Company's Renewables & Energy Infrastructure Group, formed in 2004, has progressively established itself as one of the leaders in debt financing for renewable energy facilities. We are one of a small number of firms that are able to access the debt capital markets to finance renewable energy projects. Our team has recently executed renewable energy project financings for wind, solar, renewable energy transmission, fuel cell and methane gas technologies. Additionally, our team has financed smart grid technology projects; coal-fired power plants and hydropower facilities for many municipal utilities.

George K. Baum & Company specializes in providing access to capital market long-term bond and loan financing for renewable energy and energy savings contracts. We understand the following types of renewable technologies:

Biomass
Biomethane
Fuel Cell
Geothermal

Hydropower
Renewable Energy Transmission
Solar PV
Wind

 


Renewable Energy Finance Group

George K. Baum & Company provides municipal advisory and underwriting services to borrowers interested in developing, owning or participating in renewable energy projects. The Firm has experience with the renewable energy industry and understands the state and federal incentives and tax benefits associated with renewable energy projects.

Recently, we have financed projects using a host of subsidies, tax credits and unique forms of bonds to help our clients improve the economics of their renewable projects. Furthermore, George K. Baum & Company has helped our developer clients to finance technologies and processes that previously had been unable to obtain debt financing.George K. Baum & Company specializes in providing access to capital market long-term bond and loan financing for renewable energy, offering advantages over bank loans in both term length and cost of capital. We can finance Biomass, Biomethane, Fuel Cell, Geothermal and Hydropower, to name a few.

Solar Energy Projects Using Qualified Energy Conservation Bonds

Denver Public Housing Authority Qualified Energy Conservation Bonds ("QECB") Power Purchase Agreement bonds issued May 2012: 2.5 MW solar system, solar panels were placed on a distributed basis on 650 public housing unit rooftops in Denver, CO. The developer was Enfinity and OakLeaf Capital Partners. Namaste of Boulder, CO was the EPC contractor. The total cost was $10.7 million with QECB debt at $6.775 million, with the balance provided by Developer Equity and ITC Section 1603 grant. The project was successfully powered in 2014.

Other Qualified Energy Conservation Bonds and Clean Renewable Energy Bond Project Financings
  • Denver International Airport, Denver, CO: Solar Photovoltaic
  • Westfield Massachusetts Lincoln Labs: Solar Photovoltaic
  • City of Fort Collins, CO: Energy Efficiency for Municipal Utility
  • Kansas State University, Manhattan, KS: Energy Efficiency for University buildings
  • City of Fargo, ND: Wind Project
  • City of Colorado Springs, CO: Hydropower Project

Our Renewable Energy Finance specialists have provided a wide range of financings to our clients.
These financings include, but are not limited to, the following:

DENVER HOUSING AUTHORITY SOLAR PROJECT

 Denver Housing Authority Solar Project – Denver, CO. 2.5 MW PV Solar Installation

Denver Public Housing Authority QECB Power Purchase Agreement bonds issued May 2012: 2.5 MW solar system, solar panels were placed on a distributed basis on 650 public housing unit rooftops in Denver, CO. The developer was Enfinity and OakLeaf Capital Partners. Namaste of Boulder, CO was the EPC contractor. The total cost was $10.7 million with QECB debt at $6.775 million, with the balance provided by Developer Equity and ITC Section 1603 grant. The project was successfully powered in 2014.

BIO FUELS LLC METHANE GAS/FUEL CELL PROJECT

Bio Fuels LLC Methane Gas/Fuel Cell Project – San Diego, CA. Point Loma Project, Fuel Cell Project
GKB served as underwriter to finance the generation of renewable electricity from wasted methane gas at the Pt. Loma Wastewater facility of the city of San Diego. George K. Baum & Company structured the financing to take advantage of tax-exempt bonds, the Investment Tax Credit Grant, SGIP rebates from the California PUC and New Market Tax Credits. The methane gas is piped to fuel cells located on the campus of the University of San Diego and the city of San Diego, which purchase power ten-year power purchase agreement. 

SUNEDISON - SOLAR PANEL PROJECT

SunEdison – Solar Panel Project – CA. Irvine Unified School District and Huntington Beach Solar Installations
GKB served as underwriter for two $5 million Recovery Zone Private Facility Bonds which financed approximately 5 Megawatt ("MW") of rooftop and ground-mounted solar installations.

COLORADO SPRINGS UTILITY DEPARTMENT

Colorado Springs Utility Department – Hydro Project
GKB served as financial advisor for a $4 million Clean Renewable Energy Bonds which financed two hydropower projects. 

BIO FUELS LLC METHANE GAS/FUEL CELL PROJECT

Bio Fuels LLC Methane Gas/Fuel Cell Project – San Diego, CA. Point Loma Project, Fuel Cell Project
GKB served as underwriter to finance the generation of renewable electricity from wasted methane gas at the Pt. Loma Wastewater facility of the city of San Diego. George K. Baum & Company structured the financing to take advantage of tax-exempt bonds, the Investment Tax Credit Grant, SGIP rebates from the California PUC and New Market Tax Credits. The methane gas is piped to fuel cells located on the campus of the University of San Diego and the city of San Diego, which purchase power ten-year power purchase agreement. 

LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY

Los Angeles County Metropolitan Transportation Authority, CA
GKB originated a tax-exempt lease/purchase financing for an energy efficiency project at Metro’s Support Services Center in downtown Los Angeles. The project consisted of a rooftop-mounted 1.2 MW solar PV system (at the time, the nation’s largest solar project at a transit facility and the largest within the city of Los Angeles). The project also included new HVAC, new compressed air systems, lighting upgrades and an energy management system.  In addition to $6.3 million in combined incentives from the Los Angeles Department of Water and Power, Southern California Gas Co., and the South Coast Air Quality Management District, the Authority’s annual energy has been reduced by over $550,000 per year. The project and financing were procured under a public/private partnership.

SANITATION DISTRICTS OF LOS ANGELES COUNTY, CA

Sanitation Districts of Los Angeles County, CA 
GKB originated a Clean Renewable Energy tax credit bond financing for a 10 MW Solar Mercury 50 gas turbine generator for a landfill gas to energy plant at the Calabasas Landfill in Agoura, CA. The landfill is owned by Los Angeles County and operated by the Sanitation Districts, which developed, designed and constructed the power plant. In addition to substantial revenues and electricity savings, total air emissions are expected to be less than half of the emissions from landfill gas flares.  Financing was provided through Clean Renewable Energy Bonds (“CREBs”), which pays a Federal tax credit to the holder of the bonds and helps to lower the financing costs to the Districts.

NEW MEXICO RENEWABLE ENERGY TRANSMISSION AUTHORITY

New Mexico Renewable Energy Transmission Authority and the Edison Mission Energy High Lonesome Mesa Wind Farm – Torrance County, NM. 100 MW Wind Farm and Transmission Upgrade
GKB served as placement agent for a $75 million taxable bond, financing both transmission upgrades and turbine costs related to a 100 MW wind farm comprised of 40 2.5 MW Clipper turbines. This project was the first non-rated, non-recourse bond issue for a wind project utilizing Clipper wind turbines completed in the U.S. capital markets.

CITY OF FORT COLLINS, CO

City of Fort Collins, CO. Qualified Energy Conservation Bonds
GKB served as underwriter for a $6 million Qualified Energy Conservation Bond ("QECB") which financed a portion of the Fort Collins' new smart grid technology project.

MASSACHUSETTS SOLAR PROJECT

Massachusetts Solar Project – Westford, MA. 2 MW PV Solar Installation
GKB served as placement agent for a $5.8 million Qualified Energy Conservation Bond which financed a 2 MW ground-mounted solar installation.

CITY OF FARGO, ND

City of Fargo – Fargo, ND. Gas Collection Project
GKB served as underwriter for a $1.5 million Clean Renewable Energy Bond which financed a gas collection system and compressor equipment and related electricity generating equipment located at the city’s sanitary landfill.

COUNTY OF SONOMA, CA

County of Sonoma, CA 
GKB originated a tax-exempt and taxable lease/purchase financing for the County’s Comprehensive Energy Project (“CEP”) that has at its centerpiece a 1.4 MW fuel cell cogeneration system, which is the largest installed in California to date. The County’s CEP is expected to reduce and replace 13.4 million kWh from the PG&E grid and reduce water consumption by 19 million gallons each year. Payments due under the two separate financing transactions are expected to be completely offset by utility savings. In addition to tax-exempt financing, the County also utilized its allocation of CREBs and another tax credit bond program called Qualified Energy Conservation Bonds (“QECBs”) for a 750-kilowatt solar energy system.

STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION

State of California Department of Transportation
GKB originated a Clean Renewable Energy Bond lease/purchase financing for solar photovoltaic energy systems at 70 CalTrans facilities throughout the state. Electricity production is expected to be more than 3 million kilowatts per year, eliminating 2.8 million pounds of greenhouse gases annually. The financing costs are expected to be fully repaid from utility savings.

CITY OF BRAE, CA

City of Brea, CA 
GKB originated a Clean Renewable Energy Bond CREBs lease/purchase financing for solar photovoltaic energy systems at the city’s Civic & Cultural Center, Community Center and the Berry Street Reservoir. This project will make the city of Brea, CA, the largest municipal producer of solar energy in Orange County.

BUTTE-GLENN COMMUNITY COLLEGE DISTRICT

Butte-Glenn Community College District, CA
GKB originated a Clean Renewable Energy Bond CREBs lease/purchase and a tax-exempt lease/purchase for solar photovoltaic energy systems installed at various District sites. Upon completion of the final solar construction, the District became become the first grid-positive college in the U.S.

COUNTY OF TULARE, CA

City of Tulare, CA 
GKB originated a taxable tax credit direct subsidy lease/purchase financing for a one MW ground mounted solar photovoltaic energy system at the city’s wastewater treatment plant. The $4.9 million financing was structured as Build America Bonds (“BABs”), which were created under ARRA and pay a direct subsidy to the issuer during the financing term.

Implemented Renewable Energy Financing Structures include, but are not limited to, the following:

STAND-ALONE RENEWABLE ENERGY PROJECT FINANCE DEBT

This financing structure allows the developer to borrow debt that is non-recourse to the parent company developing the project.
It requires the creation of a bankruptcy remote Single Purpose Entity ("SPE") created for the sole purpose of owning the project, and it also requires the developer to pledge the project assets as collateral for the loan. Despite being a bankruptcy remote entity, as long as the debt is being repaid and covenants are being met, the parent company can take excess cash flow out of the SPE. This structure allows the parent company to use its balance sheet for other projects, since its balance sheet is not burdened by the project. Stand-alone renewable energy project finance debt also allows projects already in operation to be refinanced, taking equity out of the project and putting it back on the parent company's balance sheet. However, this financing structure has a higher-costing source of capital than an "on balance sheet" transaction because the project is stand-alone and does not benefit from a diverse stream of revenues in the event the project stops producing electricity, and therefore, revenue.

NMTC STRUCTURE

The NMTC program can be used by renewable energy project developers to reduce the size of the equity investment and/or debt offering.
The New Market Tax Credit ("NMTC") program was created by Congress in 2000 as part of the Community Renewal Tax Relief Act. It is administered by the Community Development Financial Institutions Fund and can be used by renewable energy project developers to reduce the size of the equity investment and/or debt offering. The program is designed to encourage investment in low-income communities. The potential economic benefits that may be derived from this program are significant. If a project is successful in obtaining an allocation of NMTCs, it would supplement the equity contribution to the project, thus reducing the amount of debt required to complete the project and enhancing a project's economic returns. With NMTC bonds, a project is expected to have a 15-20% cost reduction through the monetization of new market tax credit equity. George K. Baum & Company has relationships with lenders that are comfortable with the NMTC structure and the collateral sharing issues that accompany the financing structure. GKB does not play a role in sourcing tax-equity investors to purchase the NMTCs, though GKB has been successful in placing leveraged loans with lenders that are not simultaneously serving as tax-equity investors.

TAX-EXEMPT PRE-PAY BOND STRUCTURE

This structure can be deployed when a project has secured a Power Purchase Agreement ("PPA") with a municipal owned utility ("MOU").
This financing structure allows a developer to use tax-exempt bonds to finance a renewable energy project. The benefits of this structure are tax-exempt bond proceeds that can provide a significant funding source (possibly 50% or more) to a project based on the credit and balance sheet of the MOU, not that of the developer, equity owner or project. In addition, the tax exemption of interest on the bonds results in a lower overall cost of the project. Several tax benefits to the project developer under a typical PPA structure can also be achieved. Equity owners are also still entitled to federal tax benefits, without reduction due to tax-exempt bond financing; these include production tax credits, investment tax credits, accelerated depreciation and/or federal 30%.

The MOU has access to cheaper capital than a renewable energy developer because of a likely higher credit rating than the developer and the ability of the MOU to access the tax-advantaged lower costing tax-exempt bond market. The MOU issues tax-exempt municipal bonds in an amount equal to the present value of future electricity to be produced by the renewable energy project. The project developer, in turn, uses the proceeds from the bond issuance to fund the project costs. The MOU is on the hook for the repayment of the bonds and does so by charging its customers for the electrical energy produced by the renewable energy project.

TAX-EXEMPT BONDS FOR WASTE RECOVERY

Tax-exempt bonds can be used to finance the waste recovery process of a renewable energy waste-to-energy project.
Traditional examples of private activity bonds include industrial revenue bonds and solid waste disposal revenue bonds which can be used in various segments within the renewable energy space, such as waste-to-energy, biomass, cogeneration, biofuels, landfill gas and coal gasification. The benefits of a waste recovery tax-exempt bond include a potentially longer term, as tax-exempt investors can be more lenient, and a lower cost of capital. The resulting debt structure of the project improves the IRR as the developer receives returns sooner and is afforded a lower cost of funds.

TAX-EXEMPT BOND PROJECT RENEWABLE FINANCING AND OTHER PROJECTS

Tax-exempt Bond Project Renewable Financing and Other Projects

  • Irvine Unified School District, Orange County, CA: Solar Photovoltaic
  • City of Huntington Beach, CA: Solar Photovoltaic
  • City of San Diego, CA, Point Loma Project: Methane Gas and Fuel Cell

Our Renewable Energy Finance professionals provide a wide range of services to our clients.
These services include, but are not limited to, the following:

UNDERWRITING SERVICES

George K. Baum & Company is one of the nation's leading underwriters of municipal bonds. Our decades of experience, combined with the frequency in which we bring bond issues to market, helps our clients obtain competitive borrowing costs and some of the most attractive terms available in the market.

MUNICIPAL ADVISORY SERVICES

The synergy of local expertise and national resources is unique to George K. Baum & Company and is the foundation of our municipal advisory business. These services are significantly complemented by our underwriting experience developed while working on other transactions. It is vital for a municipal advisor to be in-step with the market. We believe that to be an effective municipal advisor for a client, a firm must maintain an active underwriting presence on other transactions. Our underwriting experience allows us to analyze all of our clients' outstanding bonds for refunding opportunities, monitor market conditions to guide the timing of our clients' bond sales and interpret market activity. This underwriting experience allows us to identify the most effective structures and sale methods available for our clients' bonds and to make other informed recommendations to our clients when engaged as a municipal advisor.

DIRECT PLACEMENT FINANCINGS

In assessing a client's financing options, we detail the pros, cons and risks of direct placement financings or debt issuances sold in the public markets based on the competitive nature of the proposals and a client's own credit rating. George K. Baum & Company has a frequent presence pricing bonds in the primary market and in the arrangement of direct purchases. This experience enables our clients to obtain some of the lowest borrowing costs and most attractive terms available.

DUAL TRACK FINANCING PROCESS

George K. Baum & Company has developed a unique "dual track" financing process to assist clients in determining the most appropriate financing structure for their offering. The dual track includes distributing a credit package to banks and rating agency(ies) for their review as part of the client's Request for Proposal ("RFP") process. George K. Baum & Company orchestrates the RFP and rating processes and prepares a comprehensive summary analysis to simplify the decision-making process. The dual track RFP process often yields extraordinary results for our clients because banks are put in a competitive situation.

FINANCIAL PROJECTIONS MODELING

With direct input from the client, George K. Baum & Company utilizes its proprietary financial models that forecast and stress-test the client's future financial viability after incurring new, or refinancing existing, debt. The financial modeling process assists the client in developing parameters around a prudent level of debt capacity. The model is an interactive tool that can be adjusted and changed in real time, allowing for informed and efficient decisions. It also serves as the basis for conveying the client's current and future financial performance to potential financing partners.

NATIONAL HOUSING FINANCE GROUP

George K. Baum & Company has one of the largest and most diverse housing finance practices in the nation. Our team of bankers, quantitative analysts and underwriting/syndicate specialists work with state and local housing finance agencies to assess their needs and those of the communities they serve and develop product and finance solutions tailored to fit them.

PRIVATE ACTIVITY BONDS & ECONOMIC DEVELOPMENT PROJECTS

George K. Baum & Company has been involved in the evaluation, structuring, underwriting and distribution of private activity bonds since the 1960s. We are familiar with the credit practices of banks that issue letters of credit and are able to provide appropriate recommendations on coverage requirements, reserve funds, additional bonds tests, capitalized interest and pricing structures needed to sell the bonds at the least cost.

IN-HOUSE QUANTITATIVE CAPABILITIES

George K. Baum & Company is at the leading edge of quantitative analysis for municipal financings. Our commitment to quantitative analysis led to the formation of a specialized quantitative finance group whose sole responsibility is to develop and implement functional and analytical tools for our clients. Our quantitative professionals do not rely on any outside resources. All of the work performed for our clients is done in-house. Our significant experience in the area of debt structuring includes all aspects of refunding and cash flow modeling, such as crossovers, invested sinking funds and transferred proceeds. Our quantitative professionals specialize in performing a variety of important tasks, including;

• Bond Structuring
• Refunding Calculations & Innovations
• Pro Forma Analysis
• Escrow Restructurings
• Cash Flow Analysis

NEW PROJECT FINANCING

George K. Baum & Company assists our clients with a wide variety of debt financing for acquiring or expanding existing facilities or building new ones using publicly issued bonds or direct purchases. Our expertise in both the public markets and the direct purchase markets enables our clients to analyze the full range of financing possibilities.

RATING AGENCY PRESENTATIONS

George K. Baum & Company has developed proprietary methodologies for working with rating agencies to secure first-time, or obtain renewed, ratings for our borrowers. George K. Baum & Company devotes extensive resources to the development of each credit package with the intention of exceeding the expectations of the client and rating agencies.

REFINANCING & RESTRUCTURING DEBT

George K. Baum & Company assists our clients by taking advantage of market opportunities to refinance or restructure existing debt. Cash flow savings from reduced annual debt service can improve operating budget flexibility and be reinvested by our clients.

SWAP ADVISORY SERVICES

George K. Baum & Company has advised its clients on more than 400 interest rate swap transactions totaling more than $10 billion. Our Specialty Financial Products Desk works closely with our team and clients to implement an interest rate swap strategy that meets the financial needs of those clients.

SECONDARY MARKET SUPPORT OF BONDS IN THE MIDWEST

George K. Baum & Company's commitment to the municipalities of Kansas and Missouri does not end in the primary market. Investors know we are committed to supporting their bonds in the secondary market, and this significantly enhances our ability to place bonds as part of a primary offering. In the past 10 years, we have traded more than $34 billion of municipal bonds in the secondary market, including $4.6 billion of Kansas and Missouri securities.

STATE GOVERNMENT FINANCINGS

Our work in the Midwest has included bond issues to fund restoration of state capitol buildings, improvements to highways and turnpikes, structuring and implementation of clean water/wastewater revolving fund, and numerous healthcare and higher education financings.