Rooftop Solar Project to Create Thousands of Jobs in 28 States
Bank of America Merrill Lynch, Prologis and NRG Energy announce an offer of a conditional commitment from the U.S. Department of Energy’s Loan Programs Office to help finance the largest distributed rooftop solar generation project in the world. The loan guarantee supporting $1.4 billion of debt facilitates a total project size of about $2.6 billion, which is being financed entirely by the private sector over the next four years.
This distributed solar project will generate employment across 28 states and will create the equivalent of more than 10,000 full-year jobs. Once fully funded and completed, these installations are expected to provide approximately 733 megawatts (MW) of distributed solar energy, which is enough clean, renewable energy to power approximately 100,000 homes.
Having received this offer of a conditional commitment from the Department of Energy, the three firms are working to finalize the financing documentation for the distributed solar project and begin the first phase of installation. Of this first phase, 15 MW of solar capacity is ready immediately for construction and installation in Southern California, where the power generated will be sold to a local utility under long-term power purchase agreements that have been approved and executed. NRG Energy has committed to be the lead investor for the first phase of the project over the next 18 months.
BofA Merrill is acting as sole financial and structuring advisor and sole lender on this transaction, which is being executed under the Department of Energy’s Financial Institutions Partnership Program (FIPP). Through FIPP, the DOE will guarantee 80 percent of the $1.4 billion debt financing for this transaction.
“By harnessing the full capabilities of our platform we’re able to deliver this innovative transaction that brings together many parts of our Global Banking and Markets franchise,” said Tom Montag, president of Global Banking and Markets. “This important accomplishment transforms the dynamics of distributed solar generation, delivers a significant source of clean energy and creates thousands of jobs across the U.S.”
Prologis, operator and developer of industrial real estate, will provide site access to rooftops and will also act as developer, construction manager and program sponsor, in addition to making an equity investment. This effort is the most recent example of the company’s long-standing and industry-leading commitment to renewable energy.
“This project will add significant scale to the distributed solar market and provides economic and environmental benefit to our shareholders and customers,” said Drew Torbin, vice president of Prologis Renewable Energy.
NRG Energy, electric power company and solar energy developer, in addition to funding the first phase of the project, has a right of first offer for the remainder (up to the program total of 733 MW) and will provide development resources and project expertise for the installations.
“NRG believes rooftop solar is a smart choice for industrial, commercial and residential property owners in markets around the country, and this program provides the commercial scale that will bring the benefits of solar power to customers across the country,” said Tom Doyle, president of NRG Solar, NRG’s solar subsidiary. “This program will nearly double the amount of grid-connected solar online in the United States today and make another positive contribution to cleaner air and a healthy environment.”
Within BofA Merrill, the transaction was led by the Cross Asset Solutions and Strategies group, a team established to leverage the bank’s entire platform and coordinate the vast resources of the firm from origination to execution, in partnership with the company’s Global Investment Banking and Global Leasing teams. In addition to demonstrating the strength of its Global Banking and Markets platform, this transaction also is a part of the company’s 10-year, $20 billion environmental business initiative, which focuses on addressing climate change by aligning its global financial products and services to help advance energy efficiency and low-carbon energy markets.