1st Institutional Investment in Solar Project Finance Completed

MMA Renewable Ventures, LLC, a subsidiary of (Municipal Mortgage & Equity: NYSE: MMA), announced it has syndicated the first institutional investment in solar energy project finance in the United States.

The company removes a big obstacle for renewables – the upfront cost of installing a system. It finances and owns solar systems, much like a utility, and sells the electricity at a stable rate to customers under a 20-year power purchase agreement. That means a school or business, for example, pays a rate lower than current utility rates, runs on solar without paying for the system, and the solar developer makes the sale.

This financial arrangement gives developers a turnkey solution for project finance and provides institutional investors attractive, socially-responsible tax credit equity investment opportunities.

The first investment capitalized a 901-kW solar energy system completed this month at Fetzer Vineyards, a long time sustainability leader in the wine industry. Fetzer’s solar electric system is the largest in the wine industry and one of the largest in the country. MMA Renewable Ventures will finance, operate, and maintain the generation facility and sell the power to Fetzer under the terms of a Solar Services Agreement that sets electricity costs at a fixed rate.

3 Phases Energy, a renewable energy developer and marketer, delivered Fetzer’s solar solution in Hopland, California. The system will supply 80% of Fetzer’s bottling plant’s electricity and is part of Fetzer’s 100% clean strategy, which also includes purchasing renewable energy credits.

“I commend Fetzer for being the first major winery in the country to use 100 percent clean power,” says Mindy Lubber, president of CERES, a coalition of investors and environmental groups that works with companies on sustainability issues. “This action sends a clear signal that cost-effective energy solutions are available that can benefit companies and the global environment at the same time.”

“While investment in clean energy projects is on the rise, solar projects, the largest of which tend to be small in comparison, only make sense to capital markets if they can be efficiently organized, which we have accomplished with this sponsorship and will in many more to come,” says MMA Renewable Ventures CEO Matt Cheney.

“We have had great success collaborating with key solar industry players to provide solar energy services to their customers, companies that do not want to be in the energy business to gain access to clean, predictable power, he says. “The value proposition is so great that I believe the model we’re seeing Fetzer put into action today represents the future of solar energy deployment in the corporate community as well as the public sector where it puts previously inaccessible tax incentives into play.”

When MuniMae acquired Renewable Ventures in May 2006, it was a first for a real estate financial services company. MuniMae arranges debt and equity financing for developers and owners of real estate and now, clean energy projects. As the leading sponsor of affordable housing tax credit equity investments in the U.S., CEO Mike Falcone sees financing renewables as a natural next step for MMA. Institutional clients that are interested in affordable housing are often also interested in renewable energy, and in the future, renewables will be integrated into housing and other developments.

It gives MMA new products to offer clients while advancing the clean energy market. With MMA’s capital and clout with institutional investors, this important acquisition is accelerating the flow of institutional capital into the renewable energy sector.

The acquisition is also important because renewable energy finance is where affordable housing was 30 years ago – early capital is still considered high risk. MMA’s experience creating financing solutions for affordable housing will be invaluable for renewables, which face many of the same issues.

“For more than ten years, MuniMae has arranged innovative debt and equity financing solutions. As a result, we now have a portfolio of more than $17 billion in assets under management, including approximately $7.5 billion in tax credit equity investments in affordable housing projects,” says Michael Falcone, CEO of MuniMae. “Today we?re proud to be applying our significant investment expertise and capital resources to help make installations like the new clean energy system at Fetzer Vineyards a reality.”

MMA Renewable Ventures’ innovative approach to project finance recently garnered the company the annual Solar Business Achievement Award from the Solar Electric Power Association. Awarded in the category of sustainable business plan development, the honor recognized MMA Renewable Ventures’ achievement in driving economic efficiencies and catalyzing significant growth in the solar industry.

3 Phases Energy, as both a project developer and green power marketer, has helped Fetzer achieve its renewable energy goals since 2002, providing both green power and renewable energy certificates to Fetzer’s Hopland facility. 3 Phases Energy’s development of this large solar array will enable Fetzer to produce the majority of its power onsite. This represents the first project commissioned under 3 Phases Energy’s Daylight Savings service, a solar energy development vehicle, enabled by third party capital and efficient management of the renewable energy credits (RECs), to secure 100 percent renewable energy for customers at an affordable, long term price.

www.mmarenewableventures.com