During the last webinar in our Energy Transition series, McDermott Partners Robert da Silva Ashley and Jean Bridge welcomed Paul Pace, Senior Vice President and Team Leader at KeyBank, and Andrew Chen, Managing Director of CIT, to discuss the current outlook for leading renewable energy lenders and transactions in the United States. Specifically, they focused on lenders’ perspectives on the state of debt market support for the growing range of renewable and clean energy generation infrastructure projects.
Below are the main takeaways from the webinar:
1. The market for financing renewable energy projects remains extremely competitive, compressing prices for lenders and stimulating innovations in financing structures, with credit increasingly given to power purchase contracts (PPAs) of short-lived and with previous trading tails.
2. Current supply chain delays and inflationary pressures create significant stress. Solar panels and other major equipment are stranded in ports and sharp increases in project costs (insurance, wages, operations and maintenance, etc.) are starting to have a noticeable effect on the viability of some project developments.
3. Lenders have relied heavily on client relationships with an established track record of successful project developments, a solid financial footing and credibility with industry counterparts helping to overcome current challenges.
4. Environment, social and governance (ESG) remain a priority for banking institutions motivated by regulatory and environmental factors.