Platform Investments in Renewable Energy Projects

Overview


Investments in renewable energy assets have become increasingly popular with institutional and private equity investors—and not to mention family offices—because of their reputation as a relatively safe and stable investment, along with the growing trend of investors searching for investments pursuing certain environmental, social and governance (ESG) goals. However, in recent years, because of the “seller’s market” and capital chasing too few well-structured projects, investors have experienced decreased returns and increased risk when investing directly in project acquisitions.

Considering these challenges, a recently accelerating trend is investing in development and management teams and creating a captive “platform” for future investments. Either through the purchase of a development company, the hiring of experienced personnel to create their own development platform or investments via co-development agreements, investors are exploring a variety of structures to mitigate risks associated with platform investing. Read more to find out what investors should know before selecting a platform investment structure.