Greenbacker Capital Management, LLC (“Greenbacker Capital” or “Greenbacker”), announced today that, through an affiliated fund (the “Fund”), it has made a strategic investment in Dichotomy Power LLC, an owner and operator of a growing portfolio of hydroelectric power generation stations across the Northeastern United States. The investment is a signal of the importance of hydropower as an alternative to fossil fuel generation, and of the promise of hydro assets as attractive long-term investments.
The transaction marks the third investment for the Fund, established in 2020 to provide flexible capital to small- and medium-size renewable energy infrastructure companies that are focused on developing distributed power facilities serving high-value markets across the United States. The Fund leverages Greenbacker Capital’s extensive experience and expertise in financing, engineering and operations.
The Fund’s Managing Director and Principal Benjamin Baker said, “We are proud to support the further development and progress of hydroelectric power generation through our investment in Dichotomy Power. We believe the company is uniquely positioned, with its existing facilities across the Northeast as well as the steady and experienced leadership of Ian Clark and his team, to drive long-term growth and value creation. Going forward, Greenbacker stands ready to offer our financial and technical expertise to help Dichotomy Power reach its full potential.”
Hydroelectric power generates about 80 GW of electricity across the country, or about 7% of total U.S. generating capacity. Ownership of small hydro facilities – defined as facilities with less than 10 MW in generating capacity – is highly fragmented. Mr. Clark started Dichotomy Power’s predecessor firm in 2016 as a vehicle to consolidate small hydroelectric generating assets.
Dichotomy Power CEO Ian Clark said, “I am thrilled to welcome Greenbacker as a strategic partner that shares our passion for the potential of renewable energy. With its help, we will strengthen our ability to identify attractive hydroelectric assets and optimize their performance through a unique combination of regulatory, technical and financial knowhow. We look forward to accelerating our growth trajectory and working tirelessly toward our mutual success.”
Following the transaction, which closed in November, Dichotomy Power is owned by Mr. Clark; the Fund, which is gaining a seat on the company’s board; and other investors who have invested through a fund managed by Grand Avenue Advisors. Grand Avenue Advisors is a group of fund management professionals that, with Mr. Clark, launched in 2019 to acquire a portfolio of hydroelectric assets, the first three of which were purchased from Dichotomy Power’s predecessor firm. Since then, Dichotomy Power has acquired five additional hydro facilities.
Alongside the Fund’s investment in Dichotomy Power, Grand Avenue is raising an additional round of capital from its investor base. This process is expected to conclude prior to year-end. Joshua B. Parker, Co-Founder and Principal of Grand Avenue, said, “Greenbacker’s investment provides Dichotomy Power with powerful validation, which we are certain will unlock additional streams of capital and further support the company’s growth in the hydroelectric space. We look forward to working with Ben and the entire Greenbacker team.”
About Greenbacker Capital
Greenbacker Capital Management LLC is an SEC registered investment adviser that provides advisory and oversight services related to project development, acquisition, and operations in the renewable energy, energy efficiency, and sustainability industries.
For more information, please visit www.greenbackercapital.com.
About Dichotomy Power
Founded in 2019, Dichotomy Power is an owner and operator of hydroelectric power generation facilities. Dichotomy utilizes a unique combination of regulatory, commercial, and technical expertise to grow and optimize its portfolio of assets. The company owns seven generating facilities as well as a retail power broker that connects end users to renewable energy resources.
About Grand Avenue Advisors
Founded in 2018 by four seasoned professionals, Grand Avenue Advisors focuses on finding investment opportunities that are either too small or too innovative for larger funds and institutional investors. Grand Avenue Advisors, through a special purpose structure, raises capital from outside investors to make private equity or debt investments into such small- to medium-sized companies or into private investment funds with a similar philosophy.