Questions & Answers

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1.      Is this a non-recourse loan?

  • This is a non-recourse loan and there will be no personal guarantees.

 2.      What is the term of the loan?

  •  The term of the loan is equal to the term of the Power Purchase Agreement. Terms can run as long as 20 - 25 years.

 3.      How is the rate on the loan determined

  • The rate on the loan is determined by the investment grade of the Utility Company. The Utility Company must have a Moody's investment grade of BB or better.

 4.      What is the rate range?

  • The lower the bond rating the higher the rate. The rate range is from 7% for a AAA bond rated utility to 10% for a lower rated BB utility.

 5.      How do I pay for the construction cost of the turbine?

  • Construction costs can be part of the loan package if the utility has a bond rating of A- or better. Construction must be completed in less than one year. Otherwise, construction costs will have to be paid in cash.

 6.      How are payments received?

  • Payment arrangements are made between the Lender and the Utility Company. The payments are sent to a Lockbox Account on behalf of the Borrower. The loan payment is made to the Lender and the remainder is remitted to the Borrower. It is sometimes prudent to put some of the residual payment into an escrow account to cover any shortfall if a turbine does not generate the anticipated revenue.

 7.       What if I have a lot of profit in my company. Is there a finance program that can help reduce my tax burden in the acquisition of the turbine?

  •  Yes you can lease the turbine from 60 - 96 months and still not lose the depreciation. The depreciation can be calculated in the residual buyback at the term of the lease.