Spruce Finance Closes $124 Mn Residential Solar Financing Package

Spruce Finance has closed a USD 124 million debt financing deal for its portfolio of residential solar PPAs and leases with Vantage and Sequoia

Spruce Finance, one of the largest private owner and operator of distributed generation solar and residential energy assets in the US, has closed a USD 124 million debt financing deal for its portfolio of residential solar power purchase agreements (PPAs) and leases with Vantage Infrastructure and Sequoia Economic Infrastructure Income Fund (SEQI).

The funds will provide a significant capital boost to Spruce’s M&A and organic growth objectives, as well as pay off an existing loan on its solar rooftop assets. In addition, the funds will be invested in corporate initiatives to provide enhanced customer service and experiences for the tens of thousands of solar homeowners under contract with Energy Services Experts (ESE), Spruce’s customer and asset servicing subsidiary.

“To raise USD 124 million in debt financing in the midst of the COVID-19 crisis is not only a remarkable vote of confidence in Spruce from Vantage Infrastructure and Sequoia Investment Management but also an affirmation of distributed solar as a sought-after asset class by the capital markets in general,” said Christian Fong, CEO of Spruce Finance. “The benefits of this new capital infusion will be seen nearly immediately, as we work toward acquiring additional solar portfolio acquisitions in the near future, and further scale up customer service.”

“Distributed energy infrastructure investment is only increasing, in our view,” said Dolf Kohnhorst, Director of Sequoia Investment Management, the investment adviser to SEQI. “Well-managed residential power is a core part of the 21st century’s clean energy infrastructure and grid enhancement. We are pleased to be significantly supporting the growth of Spruce as part of this process.”

In January, we had reported that Spruce Finance had completed its most significant solar portfolio acquisition to date, with its purchase of 5,864 rooftop solar assets totaling 31.3 megawatts (MW) from funds managed by Atalaya Capital Management.

In May 2019, the firm had announced the successful closing of a USD 208 million senior secured financings of its residential solar assets. The debt financing gave Spruce access to competitively priced capital, improve its capital structure and help the company grow in new solar markets.

In November 2018, Spruce had announced that it was being acquired by HPS Investment Partners, a leading global investment firm with more than USD 48 billion of assets under management.