Construction Financing
SolRiver Provides Capital For Construction
What is Construction Financing?
Construction financing is a type of funding that’s used to finance the installation of a renewable energy project. Construction financing can take the form of debt or equity. In most cases, a construction loan or line of credit is used and is periodically drawn from during system construction by the developer or EPC contractor.
How SolRiver Finances Construction
SolRiver Capital invests in financing construction for projects at the NTP stage. Many of our partners use traditional construction loans to finance EPC milestone payments. Often, the Construction Lenders require the developer (or sponsor equity) to contribute the first 15% of costs before drawing on the construction loan.
SolRiver Capital provides the Construction Equity investment needed to cover the initial construction costs not covered by your loan. That way, you get the full amount of capital you need to drive the project to COD. However, if you don’t have a construction loan, SolRiver can fund construction itself based on a milestone payment schedule.
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Criteria For Investing in Construction Or EPC Finance
SolRiver Capital invests Construction Equity in projects at the NTP stage. In the world of renewable energy project finance, the definition of NTP varies widely. In general, SolRiver considers a project ready for construction when all of the following conditions are met:
01
All revenue contracts are in place, meaning a signed PPA, and if applicable, executed REC Purchase Agreements and confirmed rebate awards.
02
An executed EPC contract(s) for the Project with rates, terms, performance guarantees and a construction schedule acceptable to SolRiver.
03
A construction loan capable of covering remaining build costs is ready to be drawn upon after meeting the proof of equity.
04
The project has secured all applicable permits necessary to construct and operate the system.
05
Site control is established via Site Lease, Site Easement, or an Option agreement.
06
If applicable, full interconnection approval
from the utility.
After our team gets a chance to review the information, we’ll follow up with you and request any additional materials necessary for our evaluation. Pending approval, we provide Construction Equity on the terms outlined below. If you don’t qualify for Construction Equity, you may be a good fit for pre-NTP Development Capital
How We Structure
Construction Equity
Typically, we structure Construction Equity as an equity investment in the project company (“ProjectCo”). The proceeds are solely used for expenses that qualify as “proof of equity” under the construction loan.
It’s SolRiver’s preference to provide the takeout financing on these projects too. In that case, we simply deduct the Construction Equity repayment from the final Purchase Price we pay to you.
How We Structure EPC
Finance
SolRiver is also happy to provide EPC Finance. EPC finance is a term for funding installers and developers during the construction of an energy system, or multiple systems, by providing a line of credit or construction revolver to the EPC directly, rather than a loan to the project. The EPC can draw funds upon reaching certain construction milestones, thereby financing the installation of the system.
Let’s Discuss Your Project
We’re ready to look at your project. To get in touch with us, pick the option below that’s easiest for you.
Send Email
Submit via Form
You can also use our online project intake form. Answer a handful of questions about the project and our team will be notified immediately.
Use Excel Sheet
Alternatively, we can provide you a short Excel worksheet with our project inputs. Simply email the file back to us with your information and we’ll be sure to review it.