Solar Back-Leverage Financing
Back-leverage is debt raised at the sponsor or holding company level, secured on the sponsor's share of project cash flows rather than on the project assets. It is common where tax equity or another investor sits at the project level.
FG Capital Advisors structures back-leverage facilities for solar and storage sponsors and places them with third party lenders.
Start Client IntakeWho This Is For
Sponsors with Tax Equity
US sponsors whose project company has a tax equity investor and who want debt behind their own interest.
Holding Companies
Owners of several solar or storage projects who want one facility at holdco level.
Sponsors Recycling Equity
Sponsors who want to release equity from operating projects to fund new development.
Joint Venture Partners
Partners who want to finance their share of a jointly owned project.
What FG Capital Advisors Arranges
Cash Flow Analysis
Modeling of distributions to the sponsor after project level obligations, including tax equity flip timing.
Structure
Holdco security, intercreditor terms with tax equity or project lenders and forbearance provisions.
Debt Sizing
Sizing to distributable cash flow with coverage tests that lenders will accept.
Lender Placement
Approach to lenders that provide back-leverage and comparison of terms.
This service is part of our Solar Project Finance Advisory work, which covers every stage of solar and renewable energy financing.
How It Works
- You send the portfolio or project details through the client intake form, including ownership structure, contracts and the capital you need.
- We review the structure, distributions and existing agreements and list the gaps in writing.
- We model the sponsor cash flows and size the facility.
- We approach lenders, negotiate the term sheet process and coordinate diligence to close.
What Lenders and Investors Look For
Clear Distributions
Project documents that allow regular distributions to the sponsor.
Intercreditor Fit
Tax equity and project lender consents and forbearance terms that protect the back-leverage lender.
Contracted Revenue
Long term revenue contracts behind the projects.
Operating History or Completion
Operating projects, or a defined path through construction to operation.
Documents to Send
Structure
Ownership chart, LLC or partnership agreements and tax equity documents.
Projects
PPAs, operating reports and any existing finance documents.
Financial
Project and holdco models and distribution history where available.
Request
Target amount, use of proceeds and preferred tenor.
Related Services and Guides
Frequently Asked Questions
How is back-leverage different from project level debt?
Project debt is secured on the project assets. Back-leverage is secured on the sponsor's ownership interest and paid from the distributions the sponsor receives.
Why does tax equity matter for back-leverage?
Tax equity investors have priority on certain cash flows and protections. The back-leverage lender needs to understand those terms and agree how they interact.
Can back-leverage refinance an existing facility?
Yes, where the existing agreements allow it. See our operational solar refinancing page for project level refinancing.
How do I start?
Send the ownership chart, key agreements and model through the client intake form.
Start Your Client Intake
Send the project through our client intake form with the details listed above. We review every submission and reply in writing with the scope, fee and next steps.
Start Client IntakeLenders and investors make their own credit and investment decisions. Terms and approval depend on their diligence, and funding is not guaranteed.
