Traditional financing often falls short when it comes to new clean energy projects. They’re too small for Wall Street, too big for community banks, and too innovative for conventional banks to underwrite. Climatize is filling this gap with a debt crowdfunding platform, enabling retail investors to participate in clean energy projects that were once exclusively the domain of institutional capital.

About Climatize

Climatize isn’t just another crowdfunding platform. Climatize is an SEC-registered Funding Portal that connects retail investors with clean energy projects. The platform offers developers a quicker, more flexible alternative to banks, focusing on shorter payback periods. For investors, it democratizes access to institutional-grade investments while mitigating risks with robust due diligence processes.

Climatize focuses on experienced developers struggling to raise funding for distributed energy resources. Typical project sizes range from $250K to $5M, making them too large for community banks yet too small for institutional financiers. They’ve entered the Southeast US market, where local lenders often struggle with clean energy underwriting, and within a year and a half, they have helped fund projects in nine states.

Climatize’s Financing Offerings

Climatize aims for repeatable and standardized financing structures, prioritizing models like PPA financing for ease of implementation and scalability. Climatize is providing a few financing options to start with:

• Grant-Backed Collateralized Debt: Developers can secure funding using grants, such as the USDA’s Rural Energy for America Program grants and tax credits, which are comparably reliable sources of repayment.
• Bridge Loans: Allows developers to access funds upfront, reinvest quickly, and repay once state or federal grants disburse.

Additionally, Climatize enables back-leveraged debt. Back-leverage debt implies taking out the debt after the project is built but with a lower APR due to the lower risk profile. This is advantageous when the weighted cost of capital of the debt is less than or equal to the cost of equity to the developer. For instance, when a developer has their balance sheet capital tied up in a project, they can use the asset and its cash flow as collateral, shifting from a 70% equity and 30% tax credit capital stack to a 60% debt, 30% tax credit, and 10% equity structure by taking out back-leverage debt. The developer is provided liquidity on their equity and replaces that with debt.

This model creates liquidity for developers to reinvest in new projects. Debt servicing is tied to cash flows from power purchase agreements (PPAs), and this financing structure relies on the cash flows from the project to the sponsor to repay the loan.

Project finance is a general term that can do the same but is often more expensive due to construction risk and contingency of future cash flows. Meanwhile, back-leveraged debt often has historical cash flow to shape debt servicing.

Eligibility Criteria

Climatize requires a strong track record from developers. Each project undergoes rigorous financial, technical, and operational scrutiny, including:

• Equipment and site lease verification
• Execution plans and tax credit eligibility
• Financial audits

Projects must fit within a specific profile to meet investor expectations and risk appetites. As such, projects must already be in the construction finance stage, ensuring securitization and mitigating risks associated with pre-development ventures.

Investor Returns and Fees

Climatize charges a 5% fee on funds raised and a 0.5% annual servicing fee. The platform’s strategy of front-loading liquidity allows for faster capital recycling, maximizing returns for investors. With over $1M already returned to investors, Climatize is proving its ability to deliver stable, impactful financial outcomes.