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Goldman Sachs

300 MW Of Japanese Solar Bonds May Be Offered By Barclays

by Jake Richardson October 27, 2015

About 300 MW of Japanese solar power projects may be supported by the British banking and investment group Barclays, in the form of solar bonds. $418 million or JPY 50 billion is the monetary value associated with the projects, should Barclays go ahead. The reason it may want to proceed is to offer an alternative investment option for its clients.

Renewable energy in Japan may double by 2030, so it seems as though solar bonds might be a reliable and attractive investment opportunity. In fact, Goldman Sachs started offering them in Japan two years ago, so Barclay’s might benefit from knowing it is already been done. (Goldman Sachs is already working on financing another solar power development – this one through a Canadian company.)

“Others may follow Goldman in the future. It’s uncertain how long the expansion will continue though,” explained Takashi Morioka, chief analyst for Rating and Investment Information. These bonds have very low interest rates, but are also generally considered to be very stable.

Grid congestion and an increase in interconnection applications might slow some of this expansion. Utilities can put the brakes on growth if they say it is not meshing well with their systems.

Barclays and Goldman Sachs are not in the business of being “green” – they are in the business of making money. When investment bankers put their money into these kinds of projects their motivation is very clear — to make money. It isn’t only Barclays and Goldman that have expressed interest in Japan’s solar power development, Deutsche Bank AG has as well.

This kind of endeavor is not primarily environmental, it is economic.

As we all know, the Fukushima incident was quite a shock to the Japanese people and one that traveled across international borders. It also spurred a new openness and urgency in relation to renewable energy, because it is much safer than aging nuclear power plants. Also, the cost of solar power has dropped so much recently, that it has become much more accepted.

Image Credit: Tawashi2006, Wiki Commons

October 27, 2015 0 comment

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9 Major Companies Take 100% Renewable Energy Pledge

by Steve Hanley September 25, 2015

written by Steve Hanley

To listen to the right wing crazies tell it, global warming and climate change are fictions created by treehuggers and do-gooders on the left who want to interrupt the never-ending flow of government dollars that prop up the global business community — those public spirited business leaders who are willing to trade away a nation’s sovereignty in order to squeeze out a few more shekels in profits. But what if using renewable energy actually increases profits instead of diminishing them? What would those hard-headed business people say then?

There’s Money In Renewables

RE100 is a global organization dedicated to getting leading business corporations to commit to using 100% renewable energy. Begun in 2014, it has already attracted several dozen major corporations. Now, 9 more have taken the 100% renewable energy pledge, including such internationally known companies as Nike, Walmart, Goldman Sachs, Johnson & Johnson, Proctor & Gamble, Salesforce, Starbucks, Steelcase, and Voya Financial.

According to the RE100 website:

“RE100 is a global initiative to engage, support and showcase influential companies committed to using 100% renewable power. It is led by The Climate Group in partnership with CDP, and is supported by the We Mean Business coalition. RE100 shares the compelling business case for renewables, while working with others to address barriers to wide-scale adoption and to develop transparent reporting mechanisms for companies.

“The private sector accounts for more than half of the world’s electricity consumption. By massively increasing business demand for renewable power as a proportion of the energy it uses, RE100 will accelerate the transformation of the global energy market, enabling the transition to a prosperous low-carbon future.”

Mark Kenber, CEO of the Climate Group says, “Research shows that the most ambitious companies have seen a 27% return on their low carbon investments. Today these companies are signaling loud and clear to COP21 negotiators that forward thinking businesses back renewables and want to see a strong climate deal in Paris.”

September 25, 2015 1 comment

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SunEdison Creates $1 Billion Construction & Operating Asset Facility

by Joshua S Hill August 19, 2015

written by Joshua S Hill

SunEdison has announced that they will form a new $1 billion warehouse investment vehicle that will fund construction costs and acquire operating assets.

The decision comes on the heels of an odd market response to SunEdison’s record second quarter growth. SunEdison, the world’s largest clean energy developer, announced its second quarterly earnings earlier this month, including record growth and 1.9 GW worth of projects currently under construction. Nevertheless, shares fell as a response to the company’s $263 million net loss, as investors were left concerned over SunEdison’s many new acquisitions.

“SunEdison’s new $1 billion warehouse provides incremental capacity for SunEdison to construct and hold assets in advance of drop down to TerraForm Power,” stated Brian Wuebbels, SunEdison chief financial officer. “The WSIP Warehouse expands our capacity beyond our existing $1.5 billion First Reserve Warehouse and the $500 million dollar TerraForm Private Warehouse. Our new warehouse supports SunEdison’s 2016 guidance for growth, reinforces the depth of demand for investor participation in SunEdison’s warehouse platform and provides repeatable and scalable funding for the future.”

This new construction and operating asset warehouse investment vehicle will hopefully allay some investor fears.

The announcement includes involvement with West Street Infrastructure Partners III (WSIP), which will invest $300 million in equity (“subject to certain conditions”), and will be managed by Goldman Sachs. The debt structuring for the vehicle will be led by Bank of America, Morgan Stanley, and Deutsche Bank, and will provide commitments of $700 million of debt in the form of a $500 million, five-year term loan, and a $200 million, four-year revolving credit facility.

SunEdison will be left with the ability to expand the facility by up to $1 billion, to a total of $2 billion, subject to certain conditions, and SunEdison’s initial yieldco, TerraForm Power, will have an exclusive call right over the warehoused assets.

“We are excited to partner with SunEdison as we seek to expand our portfolio of investments in solar and wind projects,” said Edward Pallesen, head of the Infrastructure Investment Group for the Americas within the Merchant Banking Division at Goldman Sachs. “SunEdison and TerraForm Power have a proven track record of delivering high quality renewable energy projects, and we are pleased to be able to support their future growth initiatives.”

August 19, 2015 0 comment

Bank of America is one of 13 major corporations who have pledged to make major investments in clean technologies.

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Corporations, Clinton Take Lead In Renewable Energy Fight

by Steve Hanley July 27, 2015

written by Steve Hanley

10 years ago, presidential candidate John Edwards told voters there were two Americas — one for the wealthy and one for the rest of us. Edwards was right; there are two Americas, but the fault line is between those who take climate change seriously and want to take sensible steps to moderate its effects and those who are willing to sacrifice the lives, health, and welfare of the entire American population just as long as those same wealthy people continue to shovel money into their pockets.

We used to think that business was leading the charge against any climate change action, but it turns out that is incorrect. After all, there will be nobody to sell things to if we are all dead, in nursing homes, or underwater.

American Business Pledge On Climate Change

Today, more than a dozen large US corporations pledged to invest up to $140 billion in low-carbon technology, according to Business Green. The pledge is intended to demonstrate the level of support by corporate America for an effective global climate change treaty at the United Nations’ Paris Summit in December.

According to reports, the group of 13 multinationals — including tech giants Apple and Microsoft — will join Secretary of State John Kerry in signing the American Business Act on Climate Pledge, which publicly commits them to reducing their carbon footprints and accelerating investment in clean technologies.

In addition to the investment pledges, the companies will also agree to install at least 1,600 megawatts of renewable energy capacity, reduce water use by 15%, move towards using only renewable power, and target the delivery of zero net deforestation in their supply chains. Other companies expected to sign the pledge include General Motors, the Bank of America, Coca-Cola, Goldman Sachs, and Berkshire Hathaway. The White House says more companies are expected to sign the pledge later this year.

Clinton Announces Major Energy Initiative

The news comes at almost the same time as a pronouncement from current presidential hopeful Hillary Clinton outlining a bold new climate change strategy that includes the installation of $500 million worth of solar panels within 4 years of taking office. The plan would increase the electricity capacity the US has from solar energy to 140 gigawatts — 7 times the current level.

The solar goal is part of a plan to add more renewable power to the grid in the next 10 years than during any other decade in US history. The added capacity will primarily come from wind, solar, hydro, geothermal, and other renewables. Announcing the goals on her website, Clinton said the US is “on the cusp” of a new era of energy generation. “We can create a more open, efficient and resilient grid that connects us, empowers us – improves our health and benefits us all,” she said.

Conservative politicians are mounting a sustained and well-financed attack on any government regulations that impose stricter limits on carbon dioxide emissions, preferring to believe that climate change is just another liberal trick to enslave Americans and cost business money.

July 27, 2015 3 comments