Sunday, August 5, 2012

Industry Spotlight: John May


When we think of leaders of the renewable energy field we frequently picture engineers and scientists tinkering with machines or lobbyists fighting for emissions controls and government programs that foster green energy development. But there is another element, behind the scenes, that must develop in order to make the rest possible: the financial element.

John M. May, Managing Director
Courtesy: Stern Brothers & Co. 
It is for that reason that Managing Director of Stern Brothers & Co. John May is considered a pioneer in the movement, a leader in the financial frontier. May heads up the firm’s renewable energy practice and has built a reputation as one of the top environmental bankers, focusing primarily on biofuels and biomass.

May’s most significant contribution has been navigating the use of bonds as a form of financing for alternative energy projects. With the economy in a fragile state, banks and other traditional sources of capital have become even more hesitant to take risks - a bad sign for the entire renewable energy market. May points out that even experienced European banks, which have financed alternative energy projects in the past, are shrinking its involvement in the arena.

“A key advantage the bond market provides developers is a broader and deeper pool of available capital,” said May in an article he co-authored for the April issue of Renewable Energy from Waste. “Bond buyers include insurance companies, pension funds, mutual funds, hedge funds, private equity funds, and other strategic investors. Bonds can be the sole source of debt for projects or can provide a complement to bank debt.”

May underwrote the country’s first tax-exempt bond issue to fund a landfill gas-to-electricity project in 2003. Since that time he has developed one of the first tax-exempt bond structures sold to major U.S. institutional investors to fund ethanol projects. He secured a $15 million full faith and credit guarantee from the state of Illinois for a biodiesel project in 2006. He also created the bond finance structure adopted by the USDA in its Bio-Refinery Loan Guarantee Program, resulting in the agency’s adoption of a new Interim Final Rule for the program in 2011.

Developing an industry takes contributions from competent professionals in a variety of capacities. In addition to entrepreneurs, the field needs project developers, attorneys specializing in utility and environmental law as well as savvy investment bankers and financial analysts.

May’s specialties have helped finance large-scale projects and Stern Brothers & Co. is one of the most recognized firms in the financing of biofuels of U.S. The firm represents companies we’ve written about in our technology blog, including ICM and Rentech.

Financing continues to be a hurdle for smaller-scale biomass projects. We can only hope for a “John May” to come along with similarly innovative approaches to help get projects financed and push the industry forward.

For More on John May:

Healthy Support - An Investment Outlook by John May, James Dack and Adam Pierce, Renewable Energy from Waste (Apr. 23, 2012)

Alternative Energy Financing  - Brochure by Stern Brothers & Co. 

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