Renewable Energy Finance

Hodge Bank, has long specialised in providing loan facilities for real estate transactions and development transactions. However, in recent years we have taken some of this core expertise and deployed it in the growing renewable energy sector. Our view is that the funding of renewable energy projects has many similar characteristics to real estate funding in that the phased approach to building development and turbine or solar site construction are quite alike. Once a project becomes operational then it is akin to a long term investment loan.

Our team has build up considerable experience in the financing of wind assets, both for single site turbines and larger portfolios. We provide a traditional banking service and take the time to get to know our clients and to understand their longer term strategic objectives. Based upon this, we develop lending solutions that are tailored to meet your immediate financing needs as well as serving as a foundation for a longer term funding relationship.

Our lending appetite is concentrated in established technologies, primarily wind and solar PV. The key considerations within our lending appraisal are the skills and experience of the project sponsor, effective due diligence work on the wind or solar potential of the proposed site, the proposed equipment type and support packages, along with confirmed grid connections and power purchase agreements.

Each new lending facility is bespoke in nature and will be negotiated directly between us. However, typical parameters;
Borrower types Companies, SPV, partnerships, private individuals
Loan Size generally £500k – £5m
LTV up to 80% of total project costs
Term typically up to 10 years
Amortisation profiles straight line capital and interest repayment
Covenants
  • Debt Service Coverage >150%
  • Interest cover >300%
  • Loan to cost Ratio <80%
Security
  • First legal charge over land lease
  • Renewable Energy Debenture incorporating :-
    • charge over the turbine or other renewable assets
    • assignments of all key contracts (FIT, Power Purchase Agreement, grid connection, supply & maintenance agreements, collateral warranties, construction and groundworks)
    • Direct Agreements (with step-in rights) in respect of key contracts
  • Charge over credit balances to be held on reserve / side accounts
  • Other security as case merits
Interest Margin by negotiation
Fees by negotiation

Click here to view a selection of recent transactions.