Blackstone to Invest $300 Million in Residential Solar Loans Through Loanpal
The loan will be used to finance 10,000 residential solar systems
August 29, 2020
Loanpal, a U.S.-based financial technology company, announced that Blackstone would invest nearly $300 million (~₹22.44 billion) in residential solar loans on the Loanpal platform.
According to the press release, Blackstone, a U.S.-based global investment firm, will invest through the fund managed by its credit investment arm GSO Capital Partners LP (GSO).
Loanpal is a financier of residential solar energy in the United States. The financial technology firm enables insurance companies, banks, credit unions, and asset managers to provide zero down payment options for residential solar systems. Through its platform, GSO is likely to provide financing for rooftop solar systems for 10,000 homes.
“To solve climate change, we need to deploy $10 trillion (~₹747.90 trillion) in the United States to replace fossil fuel sources of energy. As opposed to fossil fuel-based energy, renewable energy has no feedstock and no ongoing cost, so all that matters are the upfront capital expenses and solving for scale deployment,” said Tanguy Serra, President and Chief Investment Officer of Loanpal.
“Our investment will enable Loanpal to continue to expand throughout the United States, and we believe an attractive opportunity for our investors to earn a compelling risk-adjusted return and invest in the growing demand for renewable energy,” said Rob Camacho, Senior Managing Director and Co-Head of GSO’s Structured Product Groups.
According to Mercom’s 1H and Q2 Solar Funding and M&A Report, after two years of slowdown, there were eight residential and commercial solar funds announced in the first half of 2020 that brought in $1.2 billion compared to $327.4 million raised in five deals in 1H 2019.
According to Mercom Research, in Q2 2020, Paramount Equity Mortgage (dba Loanpal) completed the issuance of Loanpal Solar Loan 2020-1 Ltd. and Loanpal Solar Loan 2020-1 with an aggregate amount of $210.56 million (~₹15.67 billion).
The securitization includes three notes – A (sf) rated Class A notes, with an interest rate of 3.78% for $181.35 million (~₹13.49 billion), BBB (sf) rated Class B notes, with an interest of 5.35% for $15.45 million (~₹1.14 billion), and BB (sf) rated Class C notes with an interest of 2% for $13.75 million (~₹1.02 billion). The loan proceeds were used to finance either a Solar Energy System or a Solar Energy System with an Energy Storage System, as well as any related Home Efficiency Improvements installed at the time of installation.
Harsh Shukla is a staff reporter at Mercom India. Previously with Indian Express, he has covered general interest stories. He holds a Masters Degree in Journalism from Symbiosis Institute of Media and Communication, Pune.