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Seizing on the abundant opportunities to install clean energy infrastructure across the United States, New Energy Capital builds a cleaner, more resilient electricity grid and provides profitable investments.

Investment

$7.5 million into debt fund; $2.5 million for local co-investment, if relevant; originated in 2016

Rationale

With a focus on small to mid-sized projects and companies, the money New Energy Capital (NEC) lends is backed by real assets that generate stable cash flows. The company’s success maps directly onto the goals of McKnight’s Midwest Climate & Energy program to build a clean, resilient, and economically healthy power sector that reduces greenhouse gas emissions.

Returns

Financial Returns: Early returns are favorable. NEC is deploying capital to renewable energy developers quickly at favorable terms and has been able to recycle some of our capital.

Social & Environmental Impact: This fund is achieving strong environmental impacts by supporting the development of at least 1,500 megawatts of clean energy projects through nine investments with seven companies.

Lessons Learned

Fund manager visits allow for cross-pollination between a foundation’s investment and grantmaking functions. Climate staff gathered New Energy Capital managers, a dozen local solar policy experts, and advocates. NEC learned more about Minnesota’s thriving renewable environment while nonprofit leaders heard from a national solar financier who is seeing more attractive investment opportunities in other states.

More recently, two companies that borrow money from NEC have growing activity in Minnesota. This is an indicator that there is less regulatory uncertainty around solar gardens than when we originated the investment.

As of November 2017

Disclaimer of Endorsement: The McKnight Foundation does not endorse or recommend any commercial products, processes, or service providers.