Projects & Money 2024 Recap
Projects & Money is a fantastic event that brings together financiers, developers, and operators working in renewable infrastructure to reflect and look ahead to the new year. We attended Projects & Money this month in New Orleans, where renewable infrastructure professionals from around the country met to discuss the IRA, tax equity market economics, and more.
Along with attending the event, our COO and Co-Founder, Amandi Li, had the opportunity to speak on an amazing panel titled “The State of Project Finance - View from the C-Suite." The panel, moderated by Darin Lowder, Partner at Foley & Lardner, discussed the maturing renewable project finance market and its potential for the year ahead - opportunities and challenges. Other speakers included Gary Blitz, Global Co-CEO of M&A and Transaction Solutions/Global Head of Tax Insurance at AON, Kris Cheney, Executive Vice President: West, Central and Environmental Affairs at EDP Renewables North America, and Jesse Grossman, Chief Executive Officer & Co-Founder of Soltage.
Here’s a quick review of the top trends we heard during the conference:
As the renewable infrastructure industry moves into the new year, participants can expect to encounter rising demand due to the IRA, capacity limits on interconnection, and new players creating lots of competition - all growing pains of a maturing industry.
Regional spikes in demand could result in a boom in battery deployment across the US, in addition to other novel technologies not seen at scale before. This, in addition to new market mechanisms such as new guidance on tax credit transferability and direct pay, rising interest rates, and global conflict, creates uncertainty around energy security. 2024 will be the year to take action and accelerate growth!
Transferability opens the market.
With tax credit transferability now an option for renewable project financiers under the IRA, the door is open for more players and smaller C&I deals to enter the market. Down-market participation is expected to diversify the size and type of deals closed, as Kris Cheney said on the panel:
“In terms of demand, with the IRA influencing so many people to come into the market[…]what I’m expecting is that transferability is going to open up a whole new set of opportunities… to execute on projects that have good fundamentals, but maybe have something marking against them that would be a slight disadvantage.”
Amanda echoed Kris’ sentiment, emphasizing the importance of collaboration within the industry and the role that software should play:
“The IRA overall - all the incentives and adders… will welcome new players, new processes, new rules, sometimes new technologies… What we’re hoping for is that [transferability] helps to accelerate capital deployment. We can overcome some of [the barriers] with collaboration… and learning together…
We want to see technology being used in certain ways to streamline and accelerate deals. As a software platform, we know it plays a critical role, and whether it’s Banyan Infrastructure or a suite of solutions, ideally standards, processes will be streamlined in a certain manner… especially as we go towards smaller deals.”
While new provisions for tax credit transferability signal huge potential in the tax credit market for renewable project finance, there must be a level of standardization established so that transactions and deals flow smoothly. Data cleanliness, organized structures, and visibility will contribute greatly to the accelerated flow of deals and will help to increase their value.
Software solutions with features like data rooms and compliance templates give participants the standardization tools they need to succeed. If the industry can leverage the software available to it, from automation to deal and covenant tracking, it will be able to leverage the full value of the IRA and accelerate the deployment of sustainable capital.
Direct pay will play a big role in 2024.
Towards the end of the panel, following an insightful conversation on tax credit transferability, Amanda turned the focus to direct pay, a crucial element of the IRA’s tax credit provisions:
“The other end of that iron is the direct pay side, which we're seeing a lot of conversation around. We hope this year is [full of] more transactions and tactical execution… Working with the tax network and across communities, hospitals, schools, etc., where there is another new set of investors who need to be educated and brought in, will provide another streamlined source of output.”
With smaller deals and more players now able to participate in the renewable energy revolution, 2024 looks more and more like a year of accelerated climate capital deployment.
This is the year of action.
With the renewable project tax credit market taking shape, we are excited for the potential to come in 2024. A big theme we saw at Projects & Money was the fact that today’s market is one that belongs to the offtakers. To excel, developers should look for software solutions that will prepare their projects for market readiness as fast as possible.
Software will play a huge role in the standardization, deal execution, and reporting required of participants in today’s fast-paced market, and Banyan Infrastructure’s platform provides the sort of visibility that the C-suite and potential investors depend on to make informed decisions and strategic moves. As the sustainable infrastructure industry moves into 2024 and project finance professionals race to stay ahead of the curve, it will be those who are open to modern solutions and collaboration who see the most success.
Curious how software can simplify project finance and accelerate the renewable energy transition? Reach out to Banyan Infrastructure today to have a discussion about how our platform can reduce risk, optimize returns, and free up your talent to do meaningful work.
Get in touch with us to learn more.