Fintech arrives to streamline clean energy project finance
Podcasts

Fintech arrives to streamline clean energy project finance

Amanda Li, co-founder and COO of Banyan Infrastructure, joined Episode 52 of the Factor This! podcast to share how fintech is revolutionizing clean energy project finance. Subscribe wherever you get your podcasts.

Amanda Li was drowning in paperwork.

It was 2014, and Li was in the thick of the arduous and disorganized project finance lifecycle. She was tasked with handling all aspects of a deal as the first employee of Generate Capital, the clean energy investing darling founded by industry heavyweights Jigar Shah, Scott Jacobs, and Matan Friedman.

Each stage—originating and underwriting, closing, portfolio management, you name it—came with a litany of documents and required endless hours to maintain. Lawyers were making a killing just to keep the train on the tracks.

"I was like, there definitely needs to be better tooling here if we're really going to deploy trillions of dollars a year (into clean energy)," Li said on the Factor This! podcast from Renewable Energy World.

Li went searching for an answer.

She got a taste for the fintech movement already underway in Silicon Valley as a consultant at McKinsey, but realized that clean energy project finance had yet to benefit from the efficiencies of digitalization and automation.

"Some of these problems are not the tricky problems people should be dealing with. People should be focused on the hard problems, rather than the problem that should be done with technology, like how do I add things together in 50 Excel (spreadsheets)," Li said.

Li and Will Greene founded Banyan Infrastructure in 2018. If a credit card, car loan, or mortgage is only a few clicks away, there's no reason why infrastructure financing can't be simpler, too, they believed.

Their platform provides a single arena through which each stakeholder in the project finance lifecycle can collaborate: from underwriting and origination to portfolio management, refinancing, and back leverage. Back accounts and accounting systems are also integrated into one single location. One day, the platform could be used for project acquisition with a unified marketplace.

A Standard Solar project in Illinois (Courtesy: Standard Solar)

Streamlined systems, like Banyan's, are activating new capital that was otherwise disinterested in the cumbersome clean energy project finance workflow, Li said.

Distributed energy project developers are likely to benefit most from the transition, she added. Institutional investors have historically avoided high-volume, smaller deals.

"Distributed assets were getting incredibly difficult to underwrite without crushing the deal with overhead costs," Li said. "There's only so many ways to scale."

One of Banyan's customers, Standard Solar, which was recently acquired by Brookfield Renewable, used the platform to roll up 270 individual distributed projects.

"That is incredibly difficult," Li said. "If you want to scale and maintain that leadership, (systems are) incredibly important to have."

The Inflation Reduction Act has only magnified the need for a new approach.

In 2022, investment in U.S. renewable energy and energy storage sectors reached $54.8 billion, according to the American Council on Renewable Energy. The trade group said 84% of investors plan to increase their investments by 5% or more in 2023.