This blog first appeared on CoPower.me. CoPower is a subsidiary of Vancity Community Investment Bank and a leading provider of distributed clean energy and energy efficiency financing.
With $1.4 billion in assets under management and a diverse portfolio that includes real estate, renewable energy and urban infrastructure, Forum Equity Partners is one of Canada’s top alternative asset managers and, we’re proud to say, one of our latest project partners.
Not your traditional asset manager, Forum prides itself on taking on innovative or niche deals that other institutional investors shy away from, and unlike most of its peers has also committed to investing exclusively in socially responsible projects that satisfy do-no harm criteria. Going one step further, the firm also seeks out projects that generate measurable social and environmental returns, leading to exciting partnership opportunities with our parent company, Vancity Community Investment Bank, and CoPower.
Earlier this year, our team provided more than $3 million in refinancing for 562 residential solar PV projects in Ontario owned and operated by Forum. The loan was made through CoPower Finance Inc and represents the first residential solar projects to be added to the CoPower Green Bond portfolio.
The impact of investing in solar through CoPower Green Bonds
The 562 projects are located on the rooftops of homes across Southern Ontario, from Windsor to Ottawa, and together generate more than 2,500 MWh of clean electricity annually which is fed into the provincial electricity grid.
For many investors, the predictable, long-term cash flows associated with operational solar PV assets are attractive. In this case, each individual project holds a 20-year power purchase agreement under the province’s MicroFIT program with Ontario’s Independent Electricity Systems Operator (IESO), a crown corporation with a credit rating of Aa3 (high) from Moody’s.
As Patrick Gilmour, Forum’s Director of Asset Management explains, the strong economics of solar creates a compelling “win-win” opportunity. “The homeowners get to do their part for the planet while receiving monthly lease payments for the use of their roof. And for us, we saw an opportunity to optimize and aggregate the portfolio in addition to receiving attractive and stable, long-term cash flows from the sale of electricity,” he said.
Like VCIB and CoPower, Forum isn’t afraid to take on impactful deals that require a bit more creativity. While solar projects like these are standard in many ways—using widely available commercial technologies and a standard project finance structure—because of their small-scale they often don’t meet a more traditional investor’s mandate.
“In this case, because there are so many systems, a larger financial institution might perceive too much work or complexity,” explained Gilmour. “There’s not just a maintenance component; there’s a compliance component, too. You need to be diligent and strategic about how you’re maintaining all the systems and their productivity. We saw it as an opportunity to really leverage Forum’s strength as an asset manager.”
Values-aligned financial partnerships
It was here that the VCIB and CoPower teams were able to make a difference as well. With a focus on lending to small to midsize projects, we’ve built up a strong track-record in the distributed clean energy finance space.
“Partnership for us is key,” said Duncan Ramage, Forum’s Head of Private Equity. “Right away we knew that the VCIB and CoPower teams share our values, but they also brought a certain level of expertise to the due diligence process. Their thoughtful underwriting and partnership mindset helped us identify areas to optimize and add value to our investment.”
Today, VCIB and Forum are looking at new opportunities for collaboration, particularly as Forum increases its focus on green buildings and energy efficiency technologies. “We are constantly looking for new and better ways to drive sustainability – as well as other ESG objectives – into our investing and development activities,” said Ramage.
The testimonials/endorsements that appear on this page were solicited by CoPower Inc. and may not be representative of the views of other clients of CoPower Inc.
The information provided herein is intended for informational purposes only and is not intended to constitute a public offer, or investment advice or financial, legal, accounting, tax or other advice and should not be relied upon for such purpose. Always consult a professional regarding your specific needs and circumstances. For information specific to your situation you should consult a professional. Securities offered by affiliates of CoPower Inc. and sold by CoPower Inc. are available only to those investors resident in the Permitted Jurisdictions who meet certain legal requirements. Please carefully read the applicable offering documents and ensure that your questions are thoroughly answered by a dealing representative before investing. Green Bonds purchased through CoPower Inc., are not eligible for protection by the Canada Deposit Insurance Corporation or any other government insurer or by VCIB.