Doral Renewables Secures Up To $1.1bn Of Growth Capital from funds managed by Apollo

Doral Renewables has entered into an agreement to sell up to $500m of convertible notes to funds managed by Apollo affiliates and Migdal Insurance, a leading Israeli insurance and pension company.

The Notes are convertible to common equity interests in the company at a pre-money valuation of $1.5 billion. Doral intends to use the proceeds from the transaction to fund investments in renewable energy and storage projects being developed by the Company. In connection with the investment, Apollo partner Corinne Still will join the Company’s Board.

The investment follows the Company’s announcement in June of Bank of America Corporation’s (“Bank of America”) commitment to provide approximately $175 million of tax equity to support the Company’s flagship Mammoth North project. Subject to further project milestones, diligence, underwriting and corporate approvals, Bank of America is willing to work together with the Company towards potential additional tax equity raises to support the final two phases of the Mammoth Solar project. In addition, Bank of America has supported the Company with the issuance of approximately $75 million of Standby Letters of Credit through a back-to-back arrangement with a correspondent banking partner.

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“We are grateful to our new partners at Apollo and Bank of America for recognizing the tremendous value embedded in Doral’s project pipeline as well as in our platform as a whole and to Migdal for their continuing support,” said Evan Speece, Chief Financial Officer of Doral. “These new capital commitments, from leading investors in the space acting collaboratively with each other and Doral, will allow us to commercialize nearly 2 GW of late-stage projects, advance several gigawatts of additional projects from early-stage development to start of construction and bring us closer to our goal of creating a leading clean energy IPP in the United States.”

Doral President and CEO Nick Cohen added, “This additional growth capital from Apollo, Migdal and Bank of America reinforces our position as a leading developer, owner and operator of utility scale clean energy projects across the United States. Our renewable energy projects offer attractive opportunities to invest behind low-risk, environmentally friendly assets, while providing critical clean energy supply to help revitalize communities across rural America.”

Apollo Partner Corinne Still said, “Investing in Doral represents an opportunity to partner with a leading solar developer and highlights Apollo’s commitment to investing in companies that are enabling the energy transition. We believe Doral’s focus on large-scale projects, strong landowner relationships and high conversion rates position the Company to be one of the long-term winners in the market.”

Dylan Foo, Head of Infrastructure at Apollo, said, “We’re pleased to support Doral’s growth as the company continues to execute on its robust project pipeline. By continuing to scale and bring additional renewable energy facilities online, Doral will enhance grid stability in markets across the country while creating jobs in local communities and promoting a cleaner planet.”

Migdal’s CIO Erez Migdali said: “We are excited to participate in this investment round, having first invested in Doral in June 2021. Since then, we have watched Doral continue to achieve its plans under the stewardship of Nick and Evan. This round is a significant milestone for Doral, securing capital to advance a meaningful portion of the Company’s pipeline. We are pleased to welcome Apollo and Bank of America, two of the most reputable financial institutions in the US, who we believe are excellent partners as Doral enters its next phase of growth. Migdal continues to establish itself as Israel’s leading institutional investor in sustainable infrastructure, and our continued support of Doral fits within our targets to be a leader in the energy transition.”

The late-stage projects that Doral intends to commercialize by 2024 include the three phases of the Mammoth Solar project in Indiana and additional projects in PJM and SERC. The remaining 8 GW of Doral’s portfolio is comprised of solar and solar-plus-storage projects across the PJM, MISO, SERC, ERCOT, NYISO, SPP and NEISO markets.

Guggenheim Securities, LLC served as exclusive financial advisor and placement agent, BofA Securities served as capital markets advisor and Kirkland & Ellis LLP served as legal counsel to Doral in connection with the transactions. Allen & Overy LLP served as legal counsel to the Apollo Funds.

Source: BNN Bloomberg

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