Market Street Capital Inc. Leverages Expertise to Close the Financing Gap for First-of-a-Kind Energy Deals

• Attracting early-stage private financing can be difficult for FOAK technologies because they require large infrastructure investments without a track record, creating a “bankability gap.”
• A few factors tend to separate FOAK deals that get financed from ones that stall.
• This is the kind of multilayer structuring problem Market Street Capital is built to help sponsors navigate, not as an energy-specific lender but as an independent advisor and structurer.

Every energy technology that eventually becomes “bankable” has to survive an awkward middle stage first, the point where the tech has been proven in a lab or pilot but hasn’t yet run at commercial scale long enough for lenders to trust it. These first-of-a-kind (“FOAK”) projects are demonstration- and deployment-stage projects being brought to final investment decision for the first time, without the operating history conventional lenders rely on. These projects can’t be financed like conventional infrastructure. There’s no historical performance data, technology risk is higher and it’s harder for lenders to feel comfortable. The fix isn’t a single loan or investor, but a layered capital stack, with each layer priced for a different piece of the risk. Helping sponsors assemble and negotiate that stack is where firms such as Market Street Capital come in, working across debt, equity and structuring as sponsors pursue a financing that lenders will support.

Conventional project finance works because lenders can underwrite predictable cash flows against proven technology backed by strong offtake. However, attracting early-stage private financing can be difficult for FOAK technologies because they require large infrastructure investments without a track record, creating a “bankability gap.” Performance guarantees are thin, construction…

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Disclosures

This article is provided for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security. Any such offer may be made only pursuant to definitive offering materials and applicable transaction documents.

Nothing in this article is tax, legal or accounting advice. Readers should consult their own advisers.

Market data and third-party information are from sources believed to be reliable but have not been independently verified. No representation is made as to accuracy or completeness. Statements about financing structures are general in nature; no financing outcome can be assured.

Broker-dealer services are provided by Pickwick Capital Partners, LLC, Member FINRA/SIPC.

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