Mezzanine Financing: Capcora Raises Capital For 80 MWp Solar Project in Germany

Frankfurt am Main, Germany - Financing projects without long-term EEG remuneration continues to be a major challenge in Germany.

Various financial institutions often require long-term power purchase agreements (PPAs) with an investment grade (IG) rating in order to provide a financing commitment, and the process leading up to the actual conclusion of a PPA can be very time-consuming.

In addition, financing is usually not disbursed until late in the construction phase, while the purchasing process, including the procurement of critical components such as transformers, often has to be initiated before construction is ready and covered solely by equity.

Mezzanine financing plays an important role in bridging the gap. Capcora GmbH has successfully secured such mezzanine financing of around EUR 11 million for a German client, which was provided by the Prime Sustainable Infrastructure Debt Fund ("PSIDEF").

"This junior financing is among the pioneering instances of its type in the German solar market. Frontloaded financing addresses crucial liquidity challenges in the industry, and we're pleased to demonstrate our commitment to addressing this issue within our domestic market", said Bernhard Hofmann, Director at Capcora.

Source: IWR Online, 19 Feb 2024