Greenworks Lending acquired by global investment manager
Deal shows belief in potential of clean-energy financing
DARIEN — Greenworks Lending, which finances clean-energy commercial property projects, announced this week it had been acquired by global investment manager Nuveen — a deal intended to further expand the reach of the fast-growing Darien-based firm.
Officials at Greenworks described the transaction as a milestone for “commercial property assessed clean energy” financing. Greenworks describes itself as the country’s largest provider of CPACE financing, which gives property owners and developers access to low-cost, long-term and fixedrate funding for projects focused on energy efficiency, renewable energy and water conservation.
“We are now in a position to maintain our leadership position in the industry,” Greenworks cofounder and CEO Jessica Bailey said in an interview Tuesday. “With the huge expansion of opportunity for C-PACE financing around the country and around the world, the acquisition by Nuveen allows us to have the resources to continue to grow as well as access to a trillion-dollar balance sheet that can help us bring the most efficient financing to our commercial building owners.”
As part of Nuveen, Greenworks has joined a business with about $1.2 trillion in assets, with operations across 27 countries. The parent company of Nuveen is TIAA, which ranked No. 81 on last year’s Fortune 500 list.
“Greenworks is a pioneer in developing and scaling C-PACE as a cost-efficient marketplace solution for property owners and municipalities to pursue energy efficiency solutions for their commercial buildings,” Nuveen CEO Jose Minaya said in a statement. “The company is a triple-win demonstration of doing well by doing right: Investors get access to attractive yields, borrowers get a net reduction in operating costs through the utility savings, and the environment benefits too.”
Company officials declined to disclose the acquisition price.
Bailey and Greenworks cofounder and chief investment officer Ali Cooley will retain their current positions, while Greenworks’ approximately 50 other employees will also stay. More than half of them are based in Connecticut.
The continuity heartened supporters like Connecticut Innovations, the state-chartered venture capital organization that invested about $1.5 million in Greenworks in 2017.
“When companies in our portfolio get acquired, I look for whether they’re going to keep the jobs here in Connecticut — and Greenworks is,” said Connecticut Innovations CEO Matt McCooe. “And when our companies go big and get acquired, it’s another way for the state to work with really large corporate partners and help them to grow their businesses here in the state.”
Bailey and Cooley met in 2012 while developing and launching the Connecticut C-PACE program at the Connecticut Green Bank.
They started Greenworks in 2015 with the goal of expanding CPACE’s reach. Greenworks has since provided more than $500 million in financing to building owners and commercial real estate developers and operates across more than 25 states.
“Nuveen’s acquisition of Greenworks is validation of C-PACE as a mainstream financing tool for property owners to fund investments in renewables and energy efficiency,” said Bert Hunter, the Connecticut Green Bank’s executive vice president and chief investment officer. “Investors are increasingly demanding more environmental, social and governance options for investment, and Nuveen’s purchase of Greenworks is additional evidence of this growing trend.”
Among other milestones, Greenworks completed in 2017 the industry’s first rated securitization of C-PACE assets, and in 2018 it completed its second rated securitization.
“It was really the first time the asset class of C-PACE was established,” Bailey said. “What that means is the rating agencies were able to examine the security of these loans and cash flows from these loans and determine they had double-A-rated credit. It valued the high credit quality of what we were creating.”
Nuveen was the sole note purchaser on those securitizations, meaning that it bought their cash flows.
Greenworks’ growth reflects the momentum of clean-energy financing. In 2020, the C-PACE industry surpassed $2 billion in transactions, according to PACENation, an association of people and organizations that support PACE financing.
“The rapid growth we’ve seen has exceeded the expectations we had,” Bailey said. “The growth we’ve seen is what really encouraged us to look for a strategic partner to accelerate that growth.”
Since its founding, Greenworks has financed about $80 million worth of projects in its home state. It partners with the Green Bank on every Connecticut-based project because the latter is the statewide administrator for C-PACE financing and has to approve all of Greenworks’ deals in the state.
As of April 1, there had been a total of 338 “closed” C-PACE projects in Connecticut, according to Green Bank data.
“Greenworks Lending has been the key player in growing C-PACE financing in Connecticut,” said Mackey Dykes, the Connecticut Green Bank’s vice president of financing programs. “They are the most active lender in the state and serve all types of customers, from small businesses going solar to multi-million C-PACE financings to make new buildings more efficient.”
Among C-PACE beneficiaries, the Paul Miller Nissan car dealership in Fairfield secured financing for a nearly 15,000-square-foot solar-panel installation, which cost approximately $800,000. Through a charge on its property taxes, Miller Nissan will pay back the capital provided by Greenworks at a 6 percent interest rate during a 20-year span.
“I felt comfortable,” Gregg Miller, co-owner of Miller Nissan, told Hearst Connecticut Media in 2018. “C-PACE and the lending process was pretty in-depth and pretty intimidating at points. They made it simple. And thank God they made it simple, because we have a very complex business here.”