SolarBank Corporation and CIM Group have announced a USD 100 million financing deal to support 97 megawatts of renewable energy projects across the United States. The agreement, signed on May 9, 2025, will provide project-based funding for solar projects, with SolarBank retaining a majority ownership interest in the projects. The financing is structured through a joint venture called "New HoldCo," formed by CIM and Abundant Solar Power Inc., a fully owned subsidiary of SolarBank. The deal is expected to grow SolarBank's status as an independent power producer, with CIM investing in non-convertible preferred equity in the newly created entity.

Background and Partnership

The partnership between SolarBank and CIM Group is a significant milestone in the growth of SolarBank's solar footprint in the U.S. CIM Group is a renowned real estate and infrastructure investor with a focus on community development and ESG goals. The company has invested over USD 60 billion in projects across the U.S. since 1994. SolarBank's President and CEO, Dr. Richard Lu, stated that the financing is a major milestone in the company's plans to grow its status as an independent power producer.

The joint venture structure and financing details of the deal are complex, with CIM investing in non-convertible preferred equity in New HoldCo. SolarBank is not issuing any shares or securities as part of this transaction. The funding will be used to support solar projects with a combined capacity of 97 megawatts across the country. The purchase of project companies from Abundant Solar Power Inc. will occur in two phases, with 20% of the purchase price paid when a project reaches mechanical completion and the remaining 80% provided upon substantial completion.

SolarBank’s Joint Venture Structure and Financing Details

The joint venture structure of the deal is designed to provide funding for solar projects while allowing SolarBank to retain a majority ownership interest. New HoldCo will acquire project companies from Abundant Solar Power Inc. that collectively own 97 MW of solar capacity. The purchase price will be paid in two phases, with 20% paid when a project reaches mechanical completion and the remaining 80% provided upon substantial completion.

CIM will invest in non-convertible preferred equity in New HoldCo, with SolarBank not issuing any shares or securities as part of this transaction. The financing details of the deal are also significant, with CIM earning a 3% annual coupon on its investment. This payment will be made twice a year, with the remaining cash flow from the projects going to Abundant Solar Power Inc. after this payment.

Each solar project will earn Investment Tax Credits (ITCs), which will be sold to qualified buyers through tax credit transfer agreements (TCTAs). CIM will keep 100% of the revenue from these tax credit sales.

Tax Credit Transfers and Financial Returns

The tax credit transfers and financial returns associated with the deal are an important aspect of the financing structure. Each solar project will earn ITCs, which will be sold to qualified buyers through TCTAs. These sales will follow Section 6418 of the Internal Revenue Code. CIM will keep 100% of the revenue from these tax credit sales, providing a significant source of income for the company.

The financial returns associated with the deal are also significant, with CIM earning a 3% annual coupon on its investment. The financial returns associated with the deal are expected to be substantial, with SolarBank retaining a majority ownership interest in the projects.

The company's President and CEO, Dr. Richard Lu, stated that the financing is a major milestone in the company's plans to grow its status as an independent power producer. The deal is expected to provide a significant source of income for SolarBank, with the company earning cash flow from the projects after CIM's annual coupon payment.

Exit Strategy and Redemption Terms

The exit strategy and redemption terms associated with the deal are also significant, with New HoldCo able to redeem CIM's preferred equity 180 days after the fifth anniversary of the last project's launch. The redemption terms provide a clear exit strategy for CIM, allowing the company to realize its investment in New HoldCo. The deal is expected to provide a significant source of income for SolarBank, with the company retaining a majority ownership interest in the projects.

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