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Finance for community wind projects

MMA Renewable Ventures, a California finance company with a track record that includes dozens of renewable energy projects unrelated to wind, is creating a financing template for community owned wind farms, starting with a 10 MW project in Oregon. The company has partnered with a Sherman County landowner to build the PáTu Wind Farm in the first half of 2009. "We'll come in and provide the full financing solution," says MMA's Moira Geraghty. "We provide every dollar needed to get the project from being construction-ready to being an operating wind project." MMA expects to use a version of "flip" financing to access the federal tax credit normally only available to investors in wind power with big tax bills to offset. MMA will produce an equity player to take on majority ownership during the first ten years of the project's life to extract the tax benefits of the ten-year production tax credit (PTC). The local project owners will remain minority owners until the flip stage at ten years when they become majority owners. "We actually bring the tax equity to the table along with any debt as well as some equity. We're willing to commit to projects now but we're also among those expecting and waiting for an extension of the PTC," Geraghty says. The project will also have access to Oregon's business energy tax credit, which provides a 50% write-off on renewable projects that total less than $20 million. "We're trying to offer a product that allows the developer or landowner to remain as the owner of the project," Geraghty says. "We can bring our institutional capital to bear on smaller projects and our relationships with turbine manufacturers remove another challenge from the equation." MMA, a subsidiary of Municipal Mortgage & Equity, has other wind projects in the 10-50 MW range in its Pacific Northwest pipeline.

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