Blog Post

CleanPath amassing $800M fund for stalled solar projects

Updated: CleanPath, the solar investment fund co-founded by solar entrepreneur Matt Cheney, is raising an $800 million fund to develop mid-to-late stage solar projects, in particular, ones that have stalled and need financing. The fund — a combination of cash equity and credit — is split into two revolving funds, and comes from a group of undisclosed New York Stock Exchange-listed companies, Cheney said in an interview.

Cheney left his former solar project development company, MMA Renewable Ventures, about 9 months after it was sold to Spanish solar power developer Fotowatio in 2009. Before that, MMA Renewable Ventures was owned by Baltimore’s Municipal Mortgage & Equity, or MuniMae. “We did a lot to put together solar PPAs [purchase power agreements] and we built over 50 commercial-scale solar projects,” says Cheney about his work with MMA.

In contrast to MMA’s work putting together solar PPA’s, CleanPath will focus on later stage solar projects that either run out of money, don’t have the right team, or for some reason are unable to deliver on their solar PPA deals. While developing solar projects in general has turned into a somewhat low risk, long-term investment, CleanPath is looking to back projects that are a bit riskier (and higher-reward), and Cheney says “the key to this type of investing is that you have to have a lot of cash and credit to break these projects free.”

CleanPath is looking for solar photovoltaic projects that are anywhere between 5 MW to 25 MW to 100 MW, and ultimately CleanPath wants to invest in a collective 1 GW worth of solar projects. The fund could own and operate the projects or sell them to asset holders.

Given Google (s GOOG) recently entered the solar project development world, by putting $280 million into SolarCity’s development fund, I asked Cheney if he thought Google’s move could be a new trend for corporate investors moving into project development. Cheney said he thought there could be a rise of more corporates as the treasury cash grants for solar, provided by the stimulus package, will likely come to an end one day (perhaps end of 2013) and he thinks more corporate investors will start to step in to coincide with that move.