Structured Finance for Renewable Energy Projects: Nail Down Funding That Tracks the Sun and the Wind

1 Overview

Building a solar farm on a dusty plateau or a wind cluster in deep water demands two things the average lender hates: chunky upfront spend and cash that starts flowing months—sometimes years—later. Toss in grid-connection risk, construction hiccups and currency swings and you have a recipe for “no thanks” from a middle-office credit memo. Structured finance slices those risks into bite-sized pieces so each one lands with an investor who can stomach it. You get the capital stack closed and your turbines start spinning instead of waiting for someone else’s risk committee.

2 What Is Structured Finance for Renewables?

We isolate the revenue streams—power-purchase agreements, green certificates, carbon credits—and park them in a special-purpose vehicle. That vehicle issues senior notes, mezz pieces or pref equity to investors hungry for predictable yield backed by real assets. Because the cash flows are ring-fenced, the pricing on each layer matches its true risk rather than a blunt corporate average. The result: higher leverage, longer tenor and lighter covenants than a plain cash-flow loan.

3 Why Sponsors Choose It

• Construction bridge: cover 100 % of EPC spend without pledging the parent balance sheet.
• Refinance costly early-stage debt once the project reaches commercial operation and rating agencies bless the revenue curve.
• Pull equity out sooner to seed the next site instead of waiting for step-down amortisation.
• Price certainty: fix coupons before rate hikes bite into project IRR.

4 Our Toolbox

Instrument	Collateral Base	Advance Rate / LTV	Investor Crowd
Construction Bridge Notes	EPC contract milestones	Up to 90 % of cost-to-complete	Infra funds, DFI side-cars
PPA-Backed Bonds	Fixed-price offtake revenue	65 - 80 % of NPV	Insurance accounts, pension desks
Carbon Credit Forward Funding	Verified future issuances	50 - 70 % of forecast sale value	ESG-themed funds, corporates with offset targets
Battery Lease Stack	Revenue-share from grid services	70 - 85 % of contract value	Private credit desks, yield-co spin-offs
Merchant Tail Wrap	Post-PPA merchant exposure	50 - 60 % of merchant NPV	Commodity desks, hedge funds

5 Deal Flow Timeline

Day 1-10 — Scoping: You share the financial model, PPA term sheet and construction schedule. We size the likely debt and outline fees.
Day 11-45 — Structuring: Counsel drafts the vehicle. Technical advisers vet energy yield. Rating process kicks off if a public note is planned.
Day 46-70 — Placement: We run a targeted auction with lenders and investors. You pick the binding term sheet that best fits your price and tenor.
Day 71-90 — Execution: Documents sign, security package perfects, cash lands in the project account. Shovels hit ground or refinancing closes.
Solar rooftops close quicker, offshore wind or hybrid-storage parks can stretch past ninety days.

6 Case Files

• Brazilian solar farm: USD 80 m construction bridge priced at 3-month SOFR + 425 bps, repaid on PPA bond take-out twelve months later.
• Nordic onshore wind cluster: EUR 130 m PPA-backed bond at 4.1 % fixed, fifteen-year maturity, rated BBB flat.
• Kenyan mini-grid portfolio: USD 25 m carbon credit forward tied to Gold Standard units, advance rate 65 % of forecast strip price.

7 Risk Shields

• Independent energy-yield reports with P90, P75 and P50 scenarios baked into the model.
• Step-in rights and pre-agreed replacement EPC if the original contractor stumbles.
• Multi-currency hedge overlay for projects with dollar debt and local-currency revenue.
• Quarterly investor reporting that tracks generation versus forecast down to the megawatt-hour.

8 Why Financely

From 2020 to 2025 we have arranged USD 5.4 billion for wind, solar, biomass and storage across four continents. We scrapped twelve mandates that failed basic risk tests, which is why our live deals price inside market averages. Our blunt feedback and deep lender bench mean fewer surprises and faster close.

9 Get Started

Got a renewable project that needs funding tuned to its cash curve? Send the model and PPA term sheet. We will answer inside forty-eight hours whether structured finance can hit your target.

All figures and timelines derive from Financely Group deal logs 2020-2025. Funding remains subject to diligence, market conditions and credit-committee approval.