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Energetic Insurance credit structure helps Redaptive secure financing

22nd November 2022 - Author: Matt Sheehan

Redaptive, a San Francisco-based Energy-as-a-Service provider of energy-saving and energy-generating equipment, has gained access to a $50 million credit facility from Rabobank, thanks to a credit insurance structure provided by Energetic Insurance.

This three-company partnership is designed to enhance Redaptive’s capability to promote a more than 1,000-site portfolio of energy efficiency projects and support future pipeline development.

The $50 million Rabobank credit facility finances Redaptive’s efforts to upgrade its energy efficiency in line with growing demand from commercial and industrial (C&I) customers to reduce energy consumption.

Energetic’s credit insurance product will enable the facility to include a more diverse portfolio of credit counterparties and provide enhanced optionality for term financing.

Credit profiles are considered to be a key barrier to financing C&I energy efficiency projects and the coverage offered by Energetic allows an overall lower cost of capital for Redaptive, at the same time increasing portfolio diversification.

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Energetic issues credit insurance policies as a Managing General Underwriter (MGU) on behalf of an AA-/Aa3 rated global insurer.

“We are thrilled to partner with Redaptive and Rabobank to demonstrate the benefits of the EneRate Credit Cover policy, now in the energy efficiency sector. No individual or company should be locked out of the market or left unable to move forward on climate solutions due to a lack of financing,” said James Bowen, CEO of Energetic Insurance.

“The momentum most recently created from the Inflation Reduction Act (IRA) will increase project demand from corporates and non-profits and many will require credit enhancement to obtain financing

Matt Gembrin, CFO of Redaptive, also commented: “We are seeing an increased demand for solutions around energy efficiency. As more corporations implement ESG goals and make them a focus of both long- and short-term growth strategies, it is essential that those solutions are made available.”

“By working with an innovative lender in Rabobank, and benefiting from Energetic’s unique credit insurance platform, we are able to expand the potential pool of end customers to include a more full representation of the credit sector.”

Claus Hertel, Managing Director, Project Finance Americas at Rabobank, added: “One of the biggest barriers to achieving scale in the energy efficiency sector is the structuring challenge posed by unrated and sub-investment credit risks. Energetic Insurance helped us manage diverse credit risks and has allowed us to increase the size of the Redaptive funding at competitive terms and offer refinancing optionality.”

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