Environmental Finance's Bond Awards 2023

Award for innovation - bond structure (social bond): Sunwealth

Sunwealth says its Solar Impact bond fund structure affords investors access to diversified portfolios of community-based clean energy projects, "addressing a capital gap" in this segment of the market.

The fund bundles a variety of solar projects into a single investment vehicle, which enables non-profits, municipalities, affordable housing, houses of worship, small businesses and low-income households to access solar energy and savings "at no cost, while providing job creation and revenues for small businesses", including local solar developers and installers.

Each pool contains projects of various sizes, ranging from 25kW to 5MW.

Investors can gain exposure to these bundled projects through bond issues, over three-year, seven-year or 15-year terms, or tax equity products.

Massachusetts-based Sunwealth says that, by minimising transaction costs and bundling a variety of solar projects into a single investment vehicle, its fund enables investors to achieve an attractive return on their investment with greater social impact.

It reports to investors the specific projects they are financing social and environmental impacts such as the reduction of carbon emissions, energy saved, and jobs created through the development of the projects.

Projects that might have been perceived as risky on their own, as they are based in communities of people classified as having low- and middle-incomes, are able to receive financing at favourable rates as part of a diversified project pool anchored by creditworthy projects, Sunwealth said.

Its bond structure lowers the participation threshold for investors, to a minimum of $25,000, and leverages federal renewable energy tax credits and state-based incentives.

An example of a project is that with the New York City Housing Authority (NYCHA) to install 1.8MW of rooftop solar gardens on 27 buildings at NYCHA's Queensbridge Houses, making it the largest community solar project in New York.

Environmental Finance Bond Awards judges commended the "unique structure [that] provides capital market scalability that would not be available to smaller projects ... [a] diversified approach with co-benefits like apprenticeships".

This is the second year in a row that Sunwealth has won this award.