Using Partnership Flips to Finance Renewable Energy Projects | CLE Course

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Course Details

Course Information

smart_display Format
On-Demand
signal_cellular_alt Difficulty Level
work Practice Area
Energy

Date & Time

event Date
Thursday, July 28, 2022
schedule Time
1:00 p.m. ET./10:00 a.m. PT
timer Program Length
90 minutes

Credit Information

This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00

CLE

ALL

This CLE course will guide counsel to parties involved in financing energy projects using partnership flip tax equity structures. The webinar will dive into partnership flips and current issues in such transactions. The webinar will also cover broader trends in renewable energy financing.

Faculty

Jorge Medina

Miscellaneous

Mr. Medina is a partner in the Project Development & Finance practice and Head of Renewables (Americas). He focuses on federal tax policy and controversy issues involving renewable energy and energy transition assets and he has extensive experience structuring tax-driven transactions. Mr. Medina manages the execution of tax equity and debt transactions and represents both sponsors and tax equity investors in the energy sector in connection with energy storage, wind, solar, hydrogen, renewable natural gas, carbon capture, geothermal, biofuels and electric vehicle infrastructure projects. He is deeply familiar with all forms of tax equity structures, having closed dozens of partnership flip, lease pass-through and sale-leaseback transactions. Prior to joining the firm, Mr. Medina was co-leader of energy renewables and infrastructure at his prior law firm. He also previously served as associate general counsel-tax at automotive and energy company Tesla Inc., where he was primarily responsible for all tax issues across Tesla related to the energy and storage business and served as vice president and deputy general counsel at SolarCity, which Tesla purchased in 2016.

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Keith Martin

Co-Head of Projects

Norton Rose Fulbright, LLP

Mr. Martin is a transactional lawyer whose principal areas of practice are tax and project finance. He acted for 178 companies last year and worked on transactions in the United States and eight foreign countries. He also lobbies Congress and the Treasury Department on policy issues. He is co-head of the Firm’s project finance group.

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Description

Partnership flips are a financing tool wherein a developer forms a partnership with a tax equity investor, allocating 99 percent of taxable income and loss to the investor until the investor reaches a target return. After that, the investor's interest drops, usually to five percent, and the developer has an option to purchase the investor's interest. Cash is shared in a different ratio. There are many variations in flip structures, including yield-based flips, time-based flips, pay-go, contribution model and project-company sale structures.

The IRS has guidelines for flip transactions for renewables that taxpayers may rely on. It also issued a series of benchmarks for tax equity transactions in the historic tax credit market in the wake of the Third Circuit's decision in Historic Boardwalk. Most deals stay within the parameters set by the IRS guidelines, while some stray.

The market is facing an unusually large number of challenges this year due to tangled supply chains, labor shortages, general inflation, forced-labor issues and uncertainty around possible anti-circumvention duties, wage, apprentice and domestic content requirements, tax credit amounts, Pillar Two, a book minimum tax and direct-pay alternative to tax credits.

Listen as we provide a detailed look at flip transactions for both neophytes and experienced counsel. Webinar participants will come away with a good understanding of the basic flip structure and the main variations. They will also have a good feel for what issues are taking up the most time in deals.