Where is project finance software headed in 2024?
As we enter 2024, developers and investors seek to ramp up capital deployment and maximize the benefits of a more defined Inflation Reduction Act (IRA).
The past year has brought renewable energy’s usual mix of challenges and opportunities. Solar installations were through the roof in 2023, but California — the country’s biggest solar market — saw “Depression-level job loss” over changes to its net-metering policy. The offshore wind industry is still struggling with inflation, rising interest rates, and supply chain issues, but it also recently celebrated sending its first power to the U.S. grid. Amid a growing demand for energy, Google and Fervo unveiled a geothermal project providing emission-free, round-the-clock power to some of the tech giant’s data centers. However, first-of-a-kind (FOAK) financing remains a significant hurdle for several emerging technologies.
So, what does the future hold? It’s hard to say. Climate tech investment fell 30% compared to last year, according to CTVC Sightline’s latest report, but many in the space remain optimistic. We don’t have a crystal ball, but here’s how 2023 went for Banyan Infrastructure and why we’re excited about 2024.
A banner year for Banyan Infrastructure
As the need for streamlined project finance grew in 2023, so did we. Banyan Infrastructure doubled its revenue from the previous year and secured $25 million in Series B funding led by Energize Ventures. These successes allowed us to double our team, bringing Banyan Infrastructure to about 50 people and broadening our expertise across tech, project finance, and climate. While we’ve grown fast, we’re proud to say we’ve stayed true to our mission. With more and varied knowledge, we were able to grow not only our business but also our software offering, making key innovations to help Banyan Infrastructure stay at the forefront of project finance software.
We’ve also worked to empower the next generation of project finance, climate, and tech professionals. In 2023, Banyan Infrastructure had the opportunity to work with 11 bright, motivated young interns, many of whom are first-generation college students with ties to the Bay Area. We’re excited to see these driven young people become valuable players in the future of project finance and climate, and we are grateful for the support of initiatives like EDICT and the Emerson Collective in connecting us with several of them.
Ultimately, our growth underscores what makes Banyan Infrastructure vital to the project finance world: We can’t accelerate the energy transition without working together to ramp up capital deployment. Just as Banyan Infrastructure’s team grew, so did the number of investors and developers using our software to streamline their complex deal-making processes. Last year, Dakota Ridge, 4skies, Brawn Capital, PearlX, Highline, Kanin Energy, Orbital Farms, Access Plus Capital, and Hawaii Green Infrastructure Authority (HGIA) — to name a few — joined the Banyan Infrastructure ecosystem to accelerate the deployment of capital and provide clarity, transparency, and up-to-the-minute data on project financial and operation performance.
Building an ecosystem where developers, owner-operators, funds, banks, and other lenders and investors can collaborate to make faster, more informed decisions means drawing in various stakeholders in the project finance world. Over the past couple of years, we've also worked with banking giants NatWest and SMBC to test and refine our existing processes, boosting efficiency, scale, and liquidity across the deal life cycle. These proof-of-concept projects highlighted the value and impact of technology solutions by helping lenders accelerate their deal-making processes and drastically reduce time spent on manual data management.
Staying on the cutting edge of project finance software
With more players entering the space every day — and regulatory guidance constantly evolving — Banyan Infrastructure has leaned into market-driven product development to stay up to date with the needs of project financiers. Because collaboration is vital to accelerating deal velocity, we’ve enhanced our existing solutions over the past year to allow external users and deal collaborators to submit documents and make changes directly in their counterparties’ data rooms. Our advanced approval and task assignment workflows now help to ensure the right people get the correct documents and efficiently move each transaction forward. These workflows also allow for better risk management, as documents and data are collected on time and reviewed by the right people, addressing problems sooner and providing complete visibility into risk areas.
This has all occurred as the regulatory ground shifts beneath our feet: Throughout 2023, the federal government rolled out new guidance on IRA incentives, requiring investors, developers, and owners across the market to stay informed on a growing list of requirements. Over the past year, we dove deep into unlocking the IRA’s full potential and partnered with financiers, developers, and market participants to translate new developments in the landmark legislation into practical software upgrades to benefit our users. Our collaboration and communication with financiers have led to new tools and workflows that help standardize the project finance process, track and maintain IRA tax compliance, and maximize tax credits on projects.
Core to our platform is providing a holistic view of your business, no matter where your data comes from or what condition it’s in. To that end, we also added a new integration with Netsuite to allow our customers to ingest and calculate portfolio data with local currencies. We also continue to make forms and templates customizable to your business so you can scale quickly.
Moving forward, we aim to put more power behind the data Banyan Infrastructure holds by continuing to build crucial integrations into our platform so users have a comprehensive view of performance and key metrics across all projects, all in one central location.
Today, these innovations inform our product development, but they’ve also played a valuable role in the conversations we’ve had over the past year at events like RE+, Verge, and SF Climate Week, as well as on podcasts such as the Insider’s Guide to Energy, Factor This!, Watts Up, and Clean Power Hour. We also hosted our first webinar on de-risking tax credits last year, bringing together legal, financial, and cleantech experts to discuss how best to navigate compliance concerns and uncertainties around IRA tax credits. We’re excited to continue these conversations in 2024 and beyond, championing the push to modernize project finance.
In 2024, we are doubling down on our mission to bring project finance into the 21st century.
As the rollout of IRA incentives continues and more federal funding for clean energy becomes available, there is a lot in store this year. An emerging tax transferability market is set to heat up this year once there is more guidance. The federal government will select organizations to distribute its $14-billion green bank in March under the broader $27-billion Greenhouse Gas Reduction Fund, unleashing more capital for projects in distributed energy generation and storage, net-zero emissions buildings, and zero-emission transportation that aims to create an equitable energy transition for all. New IRA requirements around hourly tracking for hydrogen could revolutionize how clean energy is counted across the board, meaning more compliance work to come. The energy transition is moving full speed ahead.
For Banyan Infrastructure — and project financiers — this means an urgent need to stay innovative, not only in responding to the ebbs and flows of more established markets like solar and wind but in understanding project finance for FOAK technologies, from small modular nuclear reactors to advanced geothermal systems, sustainable aviation fuels, and more. It also means helping green banks and community lenders maximize their impact — and profit — as new funding opportunities emerge. By collecting, organizing, and storing more data, Banyan Infrastructure empowers users to report better both the impact and performance of projects, freeing up time spent manually gathering this information. Investors can now focus their attention where it matters most: on delivering the sustainable infrastructure capital we need at scale.
In the ever-changing project finance landscape, collaboration is critical to the success of the space. We look forward to continuing the conversation on simplifying, streamlining, and scaling project finance to meet this historic moment at events, podcasts, and in-person collaborations throughout the year, drawing in those at the forefront of renewable energy and sustainable infrastructure. Together, we can get project finance where it needs to go so everyone benefits from the energy transition. Rising tides lift all boats.
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