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Partners Group’s $400m solar deal has an ‘economic and environmental justice element’

Dimension Renewable Energy is building small-scale solar projects in lower-to-mid-market communities lacking access to clean energy generation.

Partners Group has purchased a solar company building small-scale projects throughout local communities in the US. Financial details were not disclosed, but a source familiar with the transaction said the deal was worth $400 million.

The private markets firm took a controlling stake in Atlanta-based Dimension Renewable Energy, which builds solar generation and battery storage sites averaging around 5MW in size throughout the US, the source told New Private Markets. The company, which Partners Group expects to be worth more than $1.2 billion in the coming years, is targeting communities with “high-growth” need for solar generation.

Committing upfront and growth equity to the deal, Partners Group will help Dimension finance the buildout of the company’s 800MW pipeline of 180 projects, the source said. Dimension has broken ground on 60MW so far in states along the East Coast, including Maine, New York and Virginia. Projects typically require around 20-acre sites and must be in rural and suburban communities.

Dimension is building solar projects in states that sponsor incentive programmes paying subsidies or allow tax credits to incentivise developers. A large part of the company’s focus will be on working with residents and local businesses in lower-to-middle-income communities to build clean generation sites.

As clean energy costs have fallen dramatically in recent years, research has shown that poorer communities are at greater risk of being impacted by climate change. A federal report on the National Climate Assessment in 2018 found that climate change is “exacerbating existing challenges to prosperity” in communities lacking economic mobility.

Cheaper technologies, untapped markets and supportive state governments have combined to create new opportunities for developers to bring solar generation and battery storage to households and businesses that didn’t previously have access to clean energy.

The decision to back Dimension with capital to expand has an “economic and environmental justice element”, said Todd Bright, who leads Partners Group’s infrastructure transactions as a partner at the firm, in an interview with New Private Markets. Community solar “provides benefits to all segments of society”, he said.

Partners Group also committed capital from its impact investing strategy, the PG LIFE fund.

“The social impact that these projects have ultimately will also drive value into the company,” Bright told New Private Markets. “From a risk-return standpoint, we think this is a very attractive way to invest in the US renewables space, and it also makes a lot of sense from a public policy standpoint.”

Partners Group recently appeared in New Private Markets’ inaugural Impact 20 ranking of the top global asset managers focused on sustainable investing.

Dimension was founded in 2014 by two veterans of the clean energy space, Rafael Dobrzynski and Sam Youneszadeh. The company takes “nationwide experience” developing projects throughout the US to “adapt it to local communities”, according to Dimension’s website.