Lenders making back-levered term loans to wind and solar projects focus on tax equity terms that impact their access to project cash flows and ability to foreclose.

Key Points:

..Most operating period term loans to US wind and solar projects are back-levered to tax equity investments.

..Back-levered lenders need to understand the terms of the project’s tax equity investment and how they impact the lenders’ access to project cash flows and ability to foreclose.

..Back-levered lenders often require a consent to assignment from the tax equity investor to address provisions in the tax equity documents.

..Sponsors intending to obtain back leverage should consider including customary protections for back-levered lenders in their tax equity documents.