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Alternative Energy

CCMI has provided financial consulting services for alternative energy projects since 2001. Our experience has been in wind, biomass to electricity, biogas to electricity, biochemical production, solar, and alternative fuels. Understanding the complexities of the alternative energy market, CCMI undertakes due diligence to optimize the financial structure of alternative energy projects, utilizing appropriate government programs and incentives, such as the DOE and USDA Loan Guarantee Programs and New Markets Tax Credits, to enhance project structure. Our objective is to produce the most efficient project financing for our client.

Due Diligence for Alternative Energy Projects
CCMI’s due diligence process consists of reviewing all legal documentation, including loan documents, construction contracts, power purchase/lease/off-take agreements and warranties, supply contracts, partnership agreements, offering statements, and letters of credit. CCMI also analyzes land acquisition, permitting, regulatory requirements, environmental assessments, feasibility studies and power resource evaluations.

Upon evaluating government programs and incentives, CCMI participates in the application process for relevant programs, including New Markets Tax Credits and DOE and USDA Loan Guarantee Programs. For New Markets Tax Credits, CCMI also qualifies projects, locates Community Development Entities (CDEs) with available allocations, and identifies investors. Credit analysis includes verifying the credit quality of suppliers, counterparties to off-take agreements, and consultants, as well as providing guidance throughout the application process for Borrower credit ratings.  Additionally, CCMI evaluates pro forma financials and performs structural sensitivity analysis for alternative energy projects.

Government Programs and Incentives

  • Department of Energy (DOE) Section 1703/1705 Loan Guarantee Programs

Section 1703 of Title XVII of the Energy Policy Act of 2005 (EPAct 2005) established a DOE Loan Guarantee Program for projects that “avoid, reduce, or sequester air pollutants or anthropogenic emission of greenhouse gases” and “employ new or significantly improved technologies as compared to technologies in service in the United States.” The American Recovery and Reinvestment Act of 2009 established a program under Section 1705 of Title XVII of EPAct 2005 that authorizes loan guarantees to certain renewable energy systems, electric transmission systems, and leading biofuels projects. Unlike the Section 1703 program, projects need not employ innovative technologies to qualify for loan guarantees under the Section 1705 program.

CCMI’s affiliate, FLCO, has developed an alternative energy financing program for DOE’s State and Local Government and FIPP Loan Guarantee Programs under Section 1705 of the EPAct of 2005. The Department of Energy approved FLCO’s taxable revenue bond financial structure, which provides liquidity under the Loan Guarantee Programs in today’s somewhat constrained market. FLCO’s taxable revenue bond financial structure is applicable to the Section 1703 and U.S. Department of Agriculture’s Loan Guarantee Programs as well.

  • New Markets Tax Credit (NMTC)

The Community Renewal Tax Relief Act of 2000 created the NMTC program, which is administered by the Department of Treasury’s Community Development Financial Institutions Fund (CDFI Fund), to encourage investment in low-income communities. NMTC is a 39% tax credit claimed over six years and one day. In order to qualify, investments must be made in specially created entities that are certified by the CDFI Fund as Community Development Entities (CDEs), which serve or provide capital and maintain accountability to low-income communities. NMTC is among the programs CCMI utilizes to optimize financial structure and mitigate risk for alternative energy projects. CCMI is able to qualify projects, locate CDEs with available allocations, and identify investors for the NMTC program.

  • United States Department of Agriculture (USDA) Loan Guarantee Programs

USDA’s Rural Energy for America Program (REAP) and Business and Industry (B&I) Guaranteed Loan Programs are available in rural areas, which include “all areas other than cities or towns of more than 50,000 people and the contiguous and adjacent urbanized area of such cities or towns.” The B&I Guaranteed Loan Program is designed to improve the economic and environmental climate in rural communities. As such, eligible businesses/projects must provide employment or otherwise improve the economic or environmental climate by promoting the conservation, development, and use of water for aquaculture or by encouraging the development of renewable energy systems.

The REAP Guaranteed Loan Program is available for the purchase and installation of renewable energy systems (bioenergy, geothermal, hydrogen, solar, wind, and hydro power) and energy efficiency improvements. Borrowers must be an agricultural producer or rural small business. CCMI utilizes the USDA Loan Guarantee Programs to enhance the credit quality of applicable renewable energy projects. The taxable revenue bond structure for alternative energy financing developed by CCMI’s affiliate, FLCO, is applicable to the USDA Loan Guarantee Programs.

Energy Efficiency and Power Generation Projects
CCMI’s experience in energy financing dates back to 1990, when the firm began providing capital lease financing for various energy efficiency and power generation projects. These have included projects for the following entities:

Southern Arkansas University; Tulsa Airport Authority; Philadelphia Municipal Authority; State of Mississippi Department of Mental Health; School Districts of the State of Mississippi; Community College Districts of the State of Mississippi; Jefferson Parish, Louisiana; Board of Education of the Township of Livingston, New Jersey; State of Kansas’ Facility Conservation Improvement Projects (at Pittsburg State University); Board of Public Utilities of the City of Springfield, Missouri; and Louisiana State University and Agricultural and Mechanical College.

Furthermore, in 2003, CCMI not only provided the financing, but also provided for the construction of a 22MW electrical generation power project at the U.S. Department of Energy’s Los Alamos National Laboratory through its Assignee, CCMI Power, LLC.

 

 

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