Thursday, June 23, 2011
Bank of America to Invest $2.6 Billion in Rooftop Solar
NEW YORK - Rooftop solar generation takes a giant leap forward as a consortium of companies led by Bank of America Merrill Lynch to build the largest distributed rooftop solar generation project in the world. The loan guarantee - from the Department of Energy - 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.
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.
Bank of America 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, the leading owner, 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 transaction also is a part of Bank of America'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.