Energetic Insurance and Rabobank work to expand Redaptive’s diverse customer base with credit insurance to support $50 mln credit facility

Redaptive, a San Francisco-based Energy-as-a-Service provider of energy-saving and energy-generating equipment, has announced the start of a three-company partnership designed to enhance its capability to promote a 1,000+-site portfolio of energy efficiency projects and support future pipeline development.

The innovative credit insurance structure, a first in the market, enables Redaptive to secure competitive financing from Rabobank, the leading global food and agribusiness bank and leader in energy transition and renewable energy structuring. The transaction benefits from EneRate Credit Cover available exclusively through Energetic Insurance, which issues credit insurance policies as a Managing General Underwriter (MGU) on behalf of an AA-/Aa3 rated global insurer.

The $50 mln Rabobank credit facility finances Redaptive’s continuing effort to align its energy efficiency upgrades with growing demand from commercial and industrial (C&I) customers to reduce energy consumption. Energetic’s credit insurance product will enable the facility to include a more diverse portfolio of credit counterparties and provide enhanced optionality for term financing. Growing corporate demand for energy efficiency prompted Rabobank and Redaptive to seek credit enhancement from Energetic to allow the build-out of Redaptive’s customer base to be included under the financing.

“We are seeing an increased demand for solutions around energy efficiency. As more corporations implement ESG goals and make them a focus of both long- and short-term growth strategies, it is essential that those solutions are made available,” said Matt Gembrin, CFO of Redaptive. “By working with an innovative lender in Rabobank, and benefiting from Energetic’s unique credit insurance platform, we are able to expand the potential pool of end customers to include a more full representation of the credit sector.”

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Credit profiles are a key barrier to financing C&I energy efficiency projects and the coverage offered by Energetic allows an overall lower cost of capital for Redaptive, at the same time increasing portfolio diversification. The credit insurance allows an increased percentage of non-investment grade counterparties to be included in the portfolio.

“One of the biggest barriers to achieving scale in the energy efficiency sector is the structuring challenge posed by unrated and sub-investment credit risks. Energetic Insurance helped us manage diverse credit risks and has allowed us to increase the size of the Redaptive funding at competitive terms and offer refinancing optionality,” said Claus Hertel, Managing Director, Project Finance Americas at Rabobank.

“We are thrilled to partner with Redaptive and Rabobank to demonstrate the benefits of the EneRate Credit Cover policy, now in the energy efficiency sector. No individual or company should be locked out of the market or left unable to move forward on climate solutions due to a lack of financing,” said James Bowen, CEO of Energetic Insurance. “The momentum most recently created from the Inflation Reduction Act (IRA) will increase project demand from corporates and non-profits and many will require credit enhancement to obtain financing.”

Source: Redaptive