Decarbonization-focused investment firm Aligned Climate Capital announced today that it has raised over $200 million in commitments at the final close of its sixth distributed solar fund, Aligned Solar Partners 6 LP (ASP6).
The firm said that the fund exceeded its fundraising target, and was oversubscribed at more than $240 million.
ASP6 is Aligned Climate Capital’s largest infrastructure fund to date. The fund acquires construction-ready distributed solar projects from development partners across the U.S., finances their build-out, and delivers returns through tax credit monetization, operating income distributions, and portfolio sales to institutional infrastructure investors.
The firm’s investment strategy focuses on the “middle market” of solar, and typically targets underserved and rural markets. Aligned Climate finances construction with a combination of equity and construction debt, then monetizes the tax credits and secures long-term, low-cost permanent debt.
To date, ASP6 has placed more than 25MW of distributed solar projects in service in Maine and Washington, D.C., and has acquired additional solar projects in other states, which are under construction or scheduled to begin over the next two years. The firm said that ASP6 is scheduled to make its initial cash distribution to investors in 2025 and plans to make annual cash distributions going forward, and then ultimately selling the operating portfolio to institutional investors following the tax recapture period.
Peter W. Davidson, CEO of Aligned Climate Capital, said:
“The U.S. needs new power generation to meet growing electricity demand, and solar energy is the cheapest, fastest, and cleanest technology in the market. We have been investors in this market for more than a decade and understand how solar can deliver consistent cash returns for our investors each year.”
