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wind turbines in a wide valley


A first of its kind transaction is unlocking investment in clean energy projects

Harnessing the Inflation Reduction Act to Drive Investment in Renewables

Last August, IRG Acquisitions Holdings (IRGAH) bought a collection of renewables projects across eleven different US states from American Electric Power (AEP). The deal was worth $1.5bn, but it’s not the sort of transaction that would normally attract the level of media interest that this one did – with Reuters calling it “one of a kind”. So why the column inches?

The transaction had been made possible thanks to a $580 million commitment for a never-before PTC tax credit transfer from BofA Securities, who served as transferability underwriter, placement agent and financial advisor to IRGAH - a partnership between clean energy leader Invenergy, global investment group CDPQ and funds managed by Blackstone Infrastructure Partners.

First of a kind

More accurately, this was a first of its kind deal; the only large-scale transferability transaction to complete since the Inflation Reduction Act (IRA), which made it possible, had been written into law twelve months earlier. The aim of the IRA was twofold – to reduce the budget deficit and to increase investment in clean energy. But what made it such an exciting proposition was its potential to double the pace of decarbonisation, moving the US ahead of any other country in its carbon agenda, while bolstering national energy security. Using the US tax credit system, it promoted connections between very different businesses in the energy market to find new ways of working.

Dry Lake Solar Energy Center, Nevada


Omer Farooq, Head of Sustainable Asset Finance, Global Sustainable Finance Group at Bank of America, describes the IRGAH deal as not only the ”first tax credit transfer deal in the market, but critically, also the first one to get financed in the bank market by project finance banks.

Together the transfer and associated financing solution established a blueprint for project financing that provides developers with another financing tool alongside the tax equity market.”

So how did this potentially transformative transaction occur?

Omer Farooq, Head of Sustainable Asset Finance, Global Sustainable Finance Group, Bank of America
Santa Rita East Wind Farm, Texas

Game changer

Meghan Schultz, Executive VP and CFO for Invenergy, traces its beginnings back to the IRA the year before.

“The Inflation Reduction Act was a game changer for the industry. Historically, we’d had production and investment tax credits in the US to incentivise wind and solar, but these were only renewed on an annual or maybe a biannual basis.”

Suddenly businesses discovered ten-plus years of credit were available with the IRA. “This was critical,” continues Schultz. “It allowed us to make multi-year cycle plans around our development and growth activities.”

Picture of Meghan Schultz
Meghan Schultz, Executive VP and CFO for Invenergy


“Previously, we only had the tax equity market to help monetise tax credits and that was traditionally about $20 billion a year. This was the first time that direct transferability was an option. That’s like an additional $20 billion in tax equity,” she adds.

“Transferability is brand new,” explains Farooq. “In the past if you had a tax credit it stayed with the owner – and the owner had the ability to monetise it. And if they couldn’t monetise in the current year they could carry it forward.

“What transferability does is a very simple transaction where you can either buy or sell tax credits. You can only transfer them once, but it gives businesses another monetisation route that’s easy to scale and to transact in. And then there are multiple ways to monetise it – so you have to think about how you want to monetise that credit in that specific situation.”


What also made this deal different was timing. Tax equity investors usually come in at the beginning of the project to monetise the full 10-year stream of tax credits. But AEP had decided to sell mid-lifecycle.

For Invenergy to participate in a competitive M&A process for the potential acquisition of the AEP portfolio of assets, they either had to put in place a tax equity deal or consider something completely different. This made finding a solution challenging for Schultz.

“Then, through discussions I had with different parties, we realised this was the perfect fit for a  tax credit transfer deal. It allowed us to be able to get out the door first - it also made us - as investors and owners - and Bank of America as tax credit investors comfortable entering into the transaction.”

IRGAH's acquisitions from AEP across the USA

Strong demand

While the IRGAH deal was the first of its kind to go through, the twelve months after the IRA became law saw something in the range of $5-$10 billion tax credit transfer deals made. This led to record numbers for renewable energy deployment in the US in 2023. 33.8 GW of utility-scale clean energy projects were installed, surpassing the previous record in 2021 by 12.5%.

Invenergy contributed 1,859 MWs of completed projects to that growth. Major players in the US sustainable energy sector, the company also has more than 200 clean energy projects across the globe, including a new wind energy center that reached COD in Japan.

Schultz sees this all as very exciting, but says there’s still work to be done. “There’s clearly a strong demand for clean energy, which is great, but then we also need to have enough capital to  be able to facilitate the growth and the development of such projects. The transferability for certain tax credits, direct pay for other tax credits, opens up the playing field for more participants to be able to come into this space, bringing more capital that can be invested.”

Record numbers

It seems other businesses agree. This March, The American Clean Power Association (ACP) released its Annual Market report. Clean power accounted for most of the new power capacity installed, with solar and storage leading the way – with the clean electricity produced enough to power 69 million American homes. Invenergy alone installed over 550 MW of wind capacity in 2023 according to Reuters and the company expects a nearly 50% increase in installations this year, followed by 100% year-on-year growth in 2025.

Consider these statistics across the sector from the ACP report;

  • 77% of all new power capacity installed in 2023 was solar, wind or storage
  • Developers connected 7.9GW of utility-scale solar power to the grid
  • 15.9% of U.S electricity came from zero-emission wind and solar power
  • The clean energy development pipeline surged to over 170 GW by the end of 2023
  • 26% above where it was at the same point last year

All these newly announced projects – 123 at the last count - sound like a good news story for American decarbonisation targets, but there is a caveat issued in the Clean Power 2023 report. While there was a record 170 GW in the pipeline at the end of 2023, the report points out that “the record-setting pace of annual installations still lags behind what is needed for the country to achieve a net-zero emissions economy by 2050.”


So what’s still holding the sector back? Schultz thinks there are still several stumbling blocks that need to be addressed. One is infrastructure.

“One of the critical things we are focusing on at Invenergy is building up the transmission infrastructure in this country. It’s great to have increased renewable energy generation, but you need to be able to bring that generation from the windiest and sunniest parts of the country to where it’s needed. To be able to do this requires a significant amount of transmission development. And to do that has continued to be a constraint.”

By prioritising infrastructure, it puts people at the centre of all clean energy transitions. A recommendation also made by the International Energy Agency.

“It not only improves people’s lives, but is also key to successfully implementing energy and climate policies. Local energy communities, or community-based energy projects, are showing clear benefits across the globe in deploying renewable technologies, improving efficiency, supporting reliable power supply, reducing bills, and generating local jobs. At the same time, these initiatives are garnering increased attention as effective vehicles towards more inclusive, equitable and resilient energy systems.” As more deals like the IRGAH one are green lit thanks to the IRA tax credit system, communities will continue to benefit.


Omer Farooq is positive about the coming changes. “Overall, Americans can really benefit from the IRA. The bill will help aid the development of additional renewable energy on the grid and facilitate the switch for consumers to renewable energy and electric vehicles. Plus, the IRA will help build a new clean energy manufacturing economy by investing in refurbishing old factories; building new factories; requiring high wages; and mandating apprenticeship training for companies using clean energy tax credits.”

But all these positive initiatives are hard to achieve, says Schultz, when attempted on an individual project basis. It took a forty-strong team to fit all the different  pieces of the IRGAH deal together.

“I think that's something that Invenergy is probably fairly uniquely skilled at because we have so much experience doing these types of complex transactions. We're a privately held developer in  a really capital-intensive industry. With the volume and different types of projects that we've built over the years, we've had to be creative and thoughtful in how we put together different financing structures to raise the capital we've needed to facilitate the growth.”

Collaborative thinking

Invenergy is a company in a high-growth cycle, but Schultz acknowledges that the AEP acquisition could not have proceeded if they were not working in partnership with Bank of America. This leads her to the other factor currently missing in some parts of the clean energy sector - the kind of collaborative thinking that enabled the IRGAH deal to succeed.

“We encourage people to think outside the box and find ways to facilitate more unique types of transactions. I think there can be a tendency to fall back on what is safe and how things have been financed before. We would love to see businesses doing creative things and finding new solutions – whether that’s on the technology or the financing side.”

Growth in AI

She cites renewable energies support of AI growth as a good example of clever collaboration.

“Go back five to ten years and you’d be building a utility-scale generation facility to just sell the power to the utility. What has really evolved since then is that many of the projects now sell to commercial and industrial clients. We’re really seeing that take off exponentially, because of the growth in AI, which basically facilitates these massive data centres using an incredible amount of power. More global tech companies want that power to be coming from a renewable resource. So, over the years they have really started to understand what contracts have to look like in order to support the build up of new renewable power projects. It’s a really good evolution - working closely supporting renewable energy has basically fuelled AI growth, which I think is pretty amazing.”

But even if mindsets do change it will still come back to capital and releasing it through collaboration - something which the IRA will hopefully address.

“I’m hopeful other institutions will do that – just like Bank of America were willing to do,” Schultz admits.


Omer Farooq agrees.

“It’s extremely important that banks like BofA and others within the finance community play a role educating corporates and project developers on transferability to accelerate uptake and adoption to increase the flow of funding to new and important decarbonization projects."

"We and other institutions like us can use our expertise in traditional tax equity to become pioneers in the transfer market.”

As the second anniversary of the act approaches this August what lies ahead for businesses looking to invest in the clean energy sector?

Private Clean Energy Projects Across USA post-IRA
Private Clean Energy Projects Across USA post-IRA


Farooq recommends businesses go back to the nuts and bolts of the Inflation Reduction Act.

“Just learn all about its benefits and I think businesses will find that there’s a place for it in their ecosystem. We have 20 years of really massive transformation spurred by the IRA that’s coming and which has the capacity to touch every part of our economy.”

Harnessing this potential could not only transform the clean energy sector, but the nation as we know it. Making that decarbonisation target achievable after all.

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