Baar-Zug, Switzerland – January 16, 2023
Blue Earth Capital AG (“BlueEarth”) has committed $ 12 million through its investment vehicles to PACE Equity, LLC (“PACE Equity” or the “Company”). The credit facility will support energy efficiency, renewable energy, and other climate resiliency development and renovation projects.
Electricity use in buildings alone accounts for 19% of global carbon emissions in 2021. Adding the energy use for heating these buildings increases their share of total emissions to 27%. This makes buildings operations one of the largest polluters in the global economy and a significant lever in the efforts to limit global warming. PACE Equity contributes to curbing such emissions by providing financing for all types of energy efficiency related projects, including new construction, renovations, refinancing, and renewable energy. PACE Equity also offers a dedicated lower-cost financing option for owners and developers following low-carbon design specifications that are verified by the New Buildings Institute (“NBI”).
The Company is enabled by Commercial Property-Assessed Clean Energy (“CPACE”) regulation in the United States, which provides a special financing mechanism for sustainable real estate development and efficiency retrofits. Such financing is typically structured as a low-cost, long-term, fully amortizing loan secured by a special CPACE tax assessment on the underlying property. The CPACE assessment is uniquely high quality in that it is collateralized by real assets, is senior to property mortgages, and is billed and collected alongside conventional property taxes.
While the enabling environment for greener building initiatives exists across several states, additional effort is required to grow the sector. In this context, Blue Earth’s investment offers high additionality. The PACE Equity transaction was structured as a $ 50 million mezzanine credit facility arranged by Calvert Impact Capital (“Calvert”) to unlock almost ten times as much in permanent funding from senior lenders.
Amy Wang, Head of Credit Strategies at BlueEarth, comments: “We are delighted to partner with PACE Equity to drive innovation in addressing the rising risks of climate change”.
Beau Engman, Founder & President of PACE Equity, comments: “Partnering with global leaders focused on sustainability and climate change is critical. We deliver the direct connection to developers and building owners who make decisions every day that impact carbon emissions for decades to come.”
“We are excited to continue our partnership with BlueEarth on innovative, high-impact deals” said Lucas Pappas, Director, Investments, at Calvert Impact. “BlueEarth’s commitment will enable PACE Equity to achieve even greater impact, setting a new precedent for sustainability in commercial buildings across the US.”
About PACE Equity
Since 2014, PACE Equity has funded CPACE projects in innovative ways. Using a unique end-to-end project management approach, the PACE Equity team has closed over 200 CPACE projects, participated in $ 1.5 billion of energy efficient commercial development, and enabled the elimination of 2.5 million metric tons of carbon. For more information, visit www.pace-equity.com
About Blue Earth Capital AG
Blue Earth Capital AG is a global impact investment firm headquartered in Switzerland, with operations in New York, Konstanz, and London. BlueEarth seeks to invest in businesses that address pressing environmental and social challenges, whilst generating market-rate financial returns. The firm was initiated in 2015 by Urs Wietlisbach, one of the founders of Partners Group, and is backed by the Ursimone Wietlisbach Foundation. For more information, visit www.blueearth.capital.
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