Ares Management, through funds managed by its infrastructure and power strategy and IGS Ventures (sponsors), completed a $150 million capital raise for IGS Resi Solar III. IGS Resi Solar III constitutes the sponsors’ third investment vehicle under their residential solar investment program.
IGS Resi Solar III’s capital commitments consist of cash equity from the sponsors, tax equity and debt that will be deployed to fund a portfolio of approximately 4,000 residential solar power installations with 25-year power purchase agreements or leases across multiple states.
Together with previous investment vehicles, the solar investment program has raised nearly $450 million in total capital commitments. With the addition of IGS Resi Solar III, the solar investment program is expected to build an aggregate portfolio of approximately 11,000 residential solar projects across nine states, totaling approximately 100 megawatts.
“We are thrilled to have worked with our leading capital partners to continue building upon the growth opportunity in residential solar,” Andrew Pike, partner and co-head of Ares Infrastructure and Power, said. “Executing on Solar III is a testament to the strength of our partnership with IGS and the essential services provided by our market-leading solar platform.”
“The solar market holds so much potential for growth as a way to provide sustainable energy to homes in a cost-effective way,” Mike Gatt, chief operating officer of distributed generation at IGS, said. “Established investment partnerships like the one we share with Ares empowers us to bring solar energy to more homeowners so that they can realize significant financial and environmental benefits.”
In conjunction with the capital raise, the sponsors also executed on a seven-year, $146 million senior secured financing with IGS Resi OpCo II (the borrower and operating company of the consolidated solar investment program), which included a $140 million term loan facility and a $6 million letter of credit facility. For this senior secured financing, ING acted as coordinating lead arranger, sole bookrunner, hedge coordinator and administrative agent. Silicon Valley Bank served as joint lead arranger and Bank United also acted as a lender in the transaction. U.S. Bank and other investors provided $50 million of tax equity to a subsidiary of IGS Resi Solar III.
“Ares has been a longstanding client of ING, and we are excited to continue to support them and IGS as they build out their residential solar platform,” Scott Hancock, director at ING, said. “We fully support the build out of residential solar and the renewable sector in general and are happy to be able to partner with the sponsors which have a demonstrated track record of success in the space.”
“We’re excited to partner with IGS and Ares to advance the deployment of residential solar across the U.S,” Marissa Jacobus, renewable energy investments project manager with U.S. Bancorp Community Development Corporation, the tax credit and community investment subsidiary of U.S. Bank, said. “Investing in residential solar is one of the key ways U.S. Bank can be a responsible steward of the environment, provide job growth and savings to homeowners.”
Ares Management is an alternative investment manager operating integrated businesses across credit, private equity and real estate.
Ares Infrastructure and Power provides flexible capital for cash-generating assets across the climate infrastructure, natural gas generation and energy transportation sectors.
The IGS family of companies provide natural gas, electricity and home protection products, power generation solutions off the grid, clean and domestic alternative fueling options, and solar solutions.
ING Capital is a financial services firm offering wholesale financial lending products and advisory services to its corporate and institutional clients.
With $32.7 billion in tax credit equity committed as of April 30, 2020, U.S. Bancorp Community Development Corporation, a subsidiary of U.S. Bank, provides financing for community development projects across the country using state and federally sponsored tax credit programs.