Longroad nets $500m for clean energy project ownership push

August 01, 2022 at 09:23 AM EDT

Boston-based developer Longroad Energy has raised $500 million to fuel its transition to long-term clean energy asset ownership.

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Boston-based developer Longroad Energy said it raised $500 million to fuel its move to long-term clean energy asset ownership.

Longroad's business model had focused on developing projects to sell. With an equity investment from MEAG, NZ Super Fund and Infratil, the company said it now aims to expand its current 1.5 GW portfolio to 8.5 GW of wind, solar, and energy storage projects over the next five years.

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Longroad has developed or acquired 3.2 GW of projects since its founding in 2016. It said it has a pipeline of 15 GW of wind, solar, and storage projects across 13 states.

To support its project development goals, Longroad established a relationship with First Solar and recently signed a multi-year contract with Powin Energy, affording what it said would Abe favorable procurement status and supply chain benefits.

Longroad is contracted with First Solar for nearly 4 GW of panel supply through 2026, as well as with Powin to procure up to 4.5 GWh of storage through 2025.

"This important infusion provides Longroad with the capital to rapidly transition to a strategy biased to asset ownership. It also will fuel our acquisition goals and continue to support our investments in adjacent sectors, as we did recently with Valta Energy in the DG space," said Longroad CEO Paul Gaynor.

In June, Longroad announced an investment in Valta Energy, a developer, owner, and operator of distributed generation projects.

Longroad’s rationale for the investment was to grow its exposure to the rapidly growing U.S. distributed generation segment, through an established development, ownership, and operation platform. Valta has over 200 MW of contracted solar assets in development, construction, or operations.

Longroad has an option to invest even more equity capital within the next three years. In the meantime, Longroad will leverage its financial and procurement skills and relationships to add value to Valta.

Intersect Power's 224 MWac Athos III solar farm under construction in California. (Courtesy: Intersect Power)

Despite economic turmoil associated with rising interest rates, inflation, and fears of a recession, clean energy developers have secured significant financing deals in recent weeks.

In June, Intersect Power announced a $750 million growth equity investment to accelerate the development of its clean energy and energy storage portfolio. The investment supports Intersect Power's focus on shorter tenor offtake contracts combined with large-scale battery storage and new products, like green hydrogen.

Later that month, North Carolina utility-scale solar and storage developer Pine Gate Renewables secured $500 million of financing from Generate Capital. The investment includes a $200 million equity investment and an additional $300 million commitment to a long-term asset partnership for solar project financing.

Powin, one of Longroad's battery storage suppliers, landed a $135 million growth equity deal of its own in July. GIC, Singapore's Sovereign Wealth Fund led the investment, with participation from Trilantic Energy Partners North America and Energy Impact Partners.