CAAAPITAL and Shanghai Ventures, through its structuring and commercial partner, Intelegis, have announced the launch of DG Energy Capital, a private equity fund that will provide innovative financial solutions for developers in Mexico’s distributed solar generation market. 

The fund will invest under an asset-backed structure that will allow developers to both, finance the construction of new assets and refinance their existing assets on a recurrent basis. Targeting residential, commercial and industrial projects, DG Energy Capital will leverage CAAAPITAL’s proprietary software platform to offer the most transparent, flexible and straightforward financing experience in the industry. 

This new financing solution will address a core challenge that is holding back Mexico’s distributed solar market: poor access to capital for developers. Capital is restricted for several reasons. Regulatory uncertainty and currency volatility have presented a barrier to foreign capital investing directly in this sector. Furthermore, the solar asset class is new and many financial institutions, both domestic and international, are inexperienced with the risks posed and reluctant to commit capital. This has meant that most of Mexico’s distributed solar developers currently rely exclusively on informal funding arrangements with family and friends, and those without wealthy networks stand at a disadvantage.

DG Energy Capital will change this. By building trust between investors and developers, DG Energy Capital will catalyze the growth of distributed solar as an asset class. DG Energy Capital’s mission is to help finance the transition from fossil fuels to renewable energy sources in Latin America.