First Citizens Bank Offering Tax Equity Investments in Renewable Energy Projects

Rhea-AI Summary

First Citizens Bank has announced the launch of a new tax equity investment product through its Energy Finance business to finance renewable energy projects. The product enables qualified investors to benefit from tax incentives promoting renewable energy development. The bank will focus primarily on financing solar, wind, and battery energy storage projects.

This expansion joins First Citizens with a select group of experienced lenders offering both senior debt and tax equity investments in renewable energy. The initiative aims to address a market shortage of expertise in structuring tax equity investments, potentially increasing available financing for renewable energy project development.

Positive

• Expansion into tax equity investment market addresses an existing market shortage
• Diversification of product offerings in renewable energy financing
• Entry into a specialized market with competition

Negative

• None.

Insights

Financial Analyst

The introduction of tax equity investments represents a strategic expansion into a specialized financing niche with significant growth potential. Tax equity financing is important for renewable energy projects, as it allows developers to monetize federal tax credits efficiently. The market for tax equity investments is relatively concentrated, with only a few major players, giving First Citizens Bank (FCNCA) a competitive advantage.

This move could generate substantial fee-based income while diversifying revenue streams. The focus on solar, wind and battery storage aligns with the rapid growth in renewable energy investments, driven by federal incentives under the Inflation Reduction Act. However, these investments carry inherent risks, including regulatory changes and project performance uncertainties.

Energy Finance Expert

First Citizens' entry into tax equity investments addresses a critical market gap. The renewable energy sector faces a persistent shortage of tax equity providers, despite growing demand driven by the Inflation Reduction Act's enhanced incentives. The timing is opportune, as solar and wind projects increasingly incorporate battery storage, expanding the potential deal pipeline.

The bank's existing expertise in energy finance provides a strong foundation for evaluating project risks and structuring complex tax equity investments. This positions them well to capture market share in a sector where experience and specialized knowledge create significant barriers to entry.

NEW YORK, Oct. 29, 2024 /PRNewswire/ -- First Citizens Bank today announced that its Energy Finance business is introducing a new tax equity investment product to help finance renewable energy projects.

Tax equity products enable qualified investors to reap the benefits of various tax incentives aimed at promoting the development of renewable energy. As an industry leader in renewable energy financing, First Citizens Energy Finance is well positioned to expand its product capabilities, which will now include tax equity investments.

"This new tax equity investment product allows us to further leverage our expertise in renewable energy finance," said Mike Lorusso, head of Energy Finance. "By expanding our product base to include tax equity investments, we are now even better able to serve our relationship clients with innovative options."

The new product helps address a market shortage of expertise needed to structure and deliver tax equity investments to clients that can benefit from the investment, thereby increasing the financing available to drive renewable energy project development. First Citizens Energy Finance intends to focus its tax equity investment product primarily in support of financing solar, wind and battery energy storage projects.

By adding the new tax equity investment product, First Citizens Energy Finance joins a relatively small number of experienced lenders offering either senior debt or tax equity investments to further the growth of renewable energy.

First Citizens Energy Finance leverages its deep industry knowledge and expertise to offer comprehensive financing solutions for renewable and conventional power generation. The unit manages a large, diverse portfolio that includes investments in all asset classes across the energy sector.

About First Citizens Bank
First Citizens Bank helps personal, business, commercial and wealth clients build financial strength that lasts. Headquartered in Raleigh, N.C., First Citizens has built a unique legacy of strength, stability and long-term thinking that has spanned generations. First Citizens offers an array of general banking services including a network of more than 500 branches and offices in 30 states; commercial banking expertise delivering best-in-class lending, leasing and other financial services coast to coast; innovation banking serving businesses at every stage; and a nationwide direct bank. Parent company First Citizens BancShares, Inc. (NASDAQ: FCNCA) is a top 20 U.S. financial institution with more than $200 billion in assets and a member of the Fortune 500™. Discover more at firstcitizens.com.

MEDIA RELATIONS:
John M. Moran
212-461-5507
john.moran2@firstcitizens.com

 

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SOURCE First Citizens Bank

FAQ

What new product did First Citizens Bank (FCNCA) announce on October 29, 2024?

First Citizens Bank announced a new tax equity investment product through its Energy Finance business to help finance renewable energy projects.

What types of renewable energy projects will First Citizens Bank (FCNCA) focus on with its tax equity investments?

First Citizens Energy Finance will primarily focus on financing solar, wind and battery energy storage projects.

How does First Citizens Bank's (FCNCA) new tax equity investment product address market needs?

The product addresses a market shortage of expertise needed to structure and deliver tax equity investments, helping increase financing available for renewable energy project development.