Bridging the Gap: Nexus Development Capital’s Unique Approach to Financing Low-Carbon Infrastructure Projects

In the rapidly evolving world of green infrastructure development, the challenge of securing appropriate funding is often a significant hurdle for developers. Traditional venture capital and infrastructure funds, while abundant, don’t always meet the unique needs of early-stage, low-carbon infrastructure projects. This is where Nexus Development Capital (NDC) steps in, offering a novel approach to financing that bridges the gap between venture capital and traditional infrastructure funding.

In an enlightening interview with Joshua Kaufman, CEO of Nexus Development Capital, we gain insights into their unique position in the market. With $50M under management, NDC focuses on investing $5-10M in teams developing low-carbon infrastructure projects. Kaufman describes their approach as “early-stage infrastructure.” NDC targets investments that are slightly too early for conventional infrastructure investors yet ripe with potential.

Development Capital in the Ecosystem
NDC’s strategy revolves around providing what they refer to as ‘development capital’. NDC investments often go towards proving a business model or advancing a project to a stage where it can attract larger rounds of funding from infrastructure funds or frontier funds. What sets NDC apart is its niche focus. As Kaufman explains, they cater to a segment often overlooked by venture capitalists and traditional infrastructure investors. Their sweet spot lies in projects that are too capital-intensive for venture capitalists yet too nascent for infrastructural investors. This unique positioning makes them a go-to for developers who find themselves in this funding limbo.

Many developers are thrilled to find this unique type of capital. The CEO of SWITCH Maritime mentions that: “After nearly a decade of searching for the right capital partner to support our early-stage risk profile and high capital needs of project development, we’re thankful to have found Nexus Development Capital.”

Investment Criteria and Process
NDC is particularly selective in its investments, focusing on technology readiness and the potential of the business model. They require projects to have advanced to a certain point, ensuring there’s something substantial to evaluate and build upon. Their diligence process is comprehensive, covering aspects from engineering risks to management team evaluation, ensuring that each project aligns with what larger infrastructure funds will eventually seek.

Working with Nexus Development Capital
The role of NDC in the green infrastructure ecosystem is invaluable. They provide not just capital but also strategic guidance, bridging the gap to larger funding rounds. Their involvement often means the difference between a project stalling and reaching the next level of development. As the green infrastructure sector continues to grow, the need for specialized, early-stage funding becomes increasingly vital. Nexus Development Capital is positioned to play a crucial role in this evolving landscape, facilitating the growth of low-carbon infrastructure projects at a critical stage in their development.