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A bank has laid out terms for a loan to finance a contracted solar project with a novel production hedge developed by kWh Analytics, offering adebt service coverage ratio of 1.1 times.
The 1.1 times DSCR is “unprecedented” in solar project finance, says Richard Matsui, Founder and CEO of kWh Analytics in San Francisco.
The average DSCR for solar debt in the first nine months of this year was 1.44 times, according to a survey conducted by the analytics shop ( PFR,9/11).A lower DSCR translates into a higher leverage ratio, which boosts the levered return for the sponsor.
The solar revenue put—which is structured as an insurance policy and underwritten and distributed through kWh Analytics’ licensed insurancebrokerage subsidiary, Kudos Insurance Services—guarantees 95% of the P50 case energy production of the solar project for 10 years.
“It could allow you to finance something you wouldn’t be able to come up with your equity check for otherwise,” PJ Deschenes, a partner at boutique investment bank Greentech Capital Advisors told PFR.
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