ImpactAlpha, December 11 – Traditional project finance, which pays for infrastructure for waste or energy projects, isn’t designed for the growing number of projects delivering highly localized services. Spring Lane Capital invests in companies developing sustainable energy, water and waste services that can’t secure traditional project financing.
Spring Lane has raised $156.5 million to make blended investments of growth equity for revenue-earning companies and project financing to enable them to build the facilities they need. Its approach is to invest $15 to $30 million in “project pools” that own portfolio companies’ facilities, equipment or other physical assets and which get paid off through earned revenues. The firm also kicks in an additional 10% to 20% as growth equity to the company itself.
Spring Lane has made three investments from the fund: a $21.4 million investment in Atlas Organics, a commercial composing firm that helps municipalities divert organic waste from landfills; a $65 million investment in Aries Clean Energy, which is building a “biosolids” waste processing facility in New Jersey; and an $18 million investment in Cambrian Innovation, which provides localized wastewater management and clean energy to companies and organizations.
Institutional investors and family offices in North America and Europe, including BDC Capital, Fondaction, Fonds de solidarité FTQ and Palomino Capital Corporation, invested in Spring Lane’s fund.