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The fund committed over $280 million in equity capital to 40 solar PV projects located in five US states and has already generated tax equity and related proceeds of over $110 million for its investors to date.
This fund is one of several funds managed by the Capital Dynamics Clean Energy and Infrastructure (CEI) team. In addition to solar, Capital Dynamics has invested significantly in gas-fired generation, biomass and wind, in line with its strategy of broad power infrastructure investment.
The US Solar Energy Fund reached a final close in June 2012 at USD 282 million of commitments from a diverse group of institutional investors from the US, UK, Australia, Japan, Germany and Korea. The US Solar Energy Fund was the largest renewables infrastructure fund raised globally in that year.
Capital Dynamics has successfully built a diversified portfolio of 40 solar PV projects comprising more than 75 MW of generating capacity across California, Massachusetts, New Jersey, Pennsylvania and New York. Today,over 80% of that capacity is complete and generating cash. Construction of the remaining projects is expected to be finalized during the next six months.
The fund's portfolio benefits from long-term power sales contracts with over 16 investment-grade entities, such as electric utilities, municipalities and corporate customers.
Capital Dynamics led all aspects of the investment process, including deal origination, negotiations and structuring, as well as late-stage project design activities, and also oversaw construction of the projects in the portfolio.
Capital Dynamics employed an all-equity financing strategy for the portfolio, using institutional capital to build out the portfolio projects quickly, at low cost and with significant transactional efficiency. A specialist Capital Dynamics technical team located in Scottsdale, Arizona supervises the day-to-day operation of the fund's diverse portfolio of operating assets. This includes real-time production monitoring, enabling maximization of revenue through operational excellence.
David Scaysbrook, Managing Director and Global Head of CEI at Capital Dynamics, said:
"We are delighted to have succeeded in building a large and well-diversified portfolio of projects on both US coasts that is already paying cash distributions to our investors. Investors will continue to benefit from a de-risked stream of cash flows based on a debt-free operating portfolio, long-term sales contracts with blue chip customers and an average customer credit rating of A (S&P). In finalizing this portfolio, we have completed the first step in our strategy of targeting risk-adjusted returns and long-term cash yields by being an early mover in the US solar market."