EnCap Energy Transition Fund (ETF) announced today it is launching Bildmore, a platform focused on investing in passive minority equity positions in third-party battery storage, solar, and other energy transition projects that cannot attract traditional renewable “tax equity” financing.
The 2022 Inflation Reduction Act (IRA) provides numerous incentives to targeted clean energy projects, including the ability to sell their tax credits to corporate taxpayers. The projects will require access to significant private capital from a variety of sources and forms in order to be built. Tax equity, a traditional financing source historically provided by a limited number of large banks, is in chronic short supply as a result of the IRA’s significant expansion of tax credit eligibility.
Bildmore expects to make 10 to 15 minority investments annually, initially focused on utility-scale projects and sponsors who cannot meet the traditionally narrowed requirements for tax equity but want to improve their economics beyond only transferring tax credits at a discount. ETF has a track record of backing wind and solar development and was a pioneer in investing in utility-scale battery storage with the establishment of Broad Reach Power and Jupiter Power, two of the leading US battery storage platforms.
Bildmore’s team is led by energy veteran David Haug, who has three decades of working relationships with the principals at ETF. Together they bring decades of power and energy project experience from a developer’s perspective, the key to fast transaction approval and funding. In the coming weeks, Bildmore will be announcing the addition of experienced team members from across the industry and welcoming specialists who are excited to grow in the expanded renewables funding space.
“For IRA projects, just selling tax credits leaves developer value on the table. Tax equity is great for sponsors who can check all the boxes, but lots of projects don’t fit,” says David Haug, Bildmore’s CEO. “Bildmore will focus on the battery storage and solar projects, particularly those which have chosen to leave all or part of their energy output available for ‘merchant’ sale rather than be sold under long term contracts. We want to help those development teams lacking the deep balance sheets typically required by tax equity providers,” Haug said.
“We are excited to back the Bildmore team in addressing an important need in the multi-pronged efforts to decarbonize the US energy sector,” said Shawn Cumberland, one of ETF’s four managing partners.
About EnCap Investments L.P.
Since 1988, EnCap Investments has been a leading provider of growth capital to the independent sector of the U.S. energy industry. The firm has raised 25 institutional investment funds totaling approximately $41 billion and currently manages capital on behalf of more than 350 U.S. and international investors. Founded in 2019, the EnCap Energy Transition platform is led by four Managing Partners, each with 30-35 years of experience in the development and operations of renewables and power generation. For more information, please visit www.encapinvestments.com.
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