Fund for wind energy projects and a method for establishing the same

• US 20030093345A1
• Filed: 11/09/2001
• Published: 05/15/2003
• Est. Priority Date: 11/09/2001
• Status: Abandoned Application

• Current Assignee: Michael D. Cutbirth
• Original Assignee: Michael D. Cutbirth
• Inventors: Cutbirth, Michael D.
• Application Number:
  US10/037,910
• Publication Number:
  US 20030093345A1
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: Y02P 90/90 Financial instruments for climate change mitigation, e.g. environmental taxes, subsidies or financing
• CPC Class Codes: Y04S 10/50 Systems or methods supporting the power network operation or management, involving a certain degree of interaction with the load-side end user applications

Abstract

A fund established for the purpose of investing in multiple U.S. wind energy projects. The fund is capitalized with an initial equity investment by a group of investors that includes additional equity investment over the tax-advantaged years of the projects. The fund is also capitalized with third party dual tranche financing that provides for amortization of the debt from both the cash flow generated by the projects and the additional capital contributions from the investors.

Claims

1. A tax-advantaged investment fund comprising:

an ownership interest in a plurality of wind energy projects having a return comprising a cash flow distribution, an accelerated depreciation deduction, a plurality of tax credits, and a residual value of the projects; and

capital for investing in said ownership interest in the plurality of wind energy projects, wherein a first portion of said capital comprises debt from at least one lender and a second portion of said capital comprises equity from a plurality of investors, wherein said plurality of investors each receive a portion of the return.

2. The tax-advantaged investment fund of claim 1, wherein the plurality of investors comprise a plurality of equity members that receive a portion of the return in accordance with a sharing ratio for a tax-advantaged period of the fund.

3. The tax-advantaged investment fund of claim 2, wherein said tax-advantaged period comprises a period of time provided by a statute for the provision of the plurality of tax credits.

4. The tax-advantaged investment fund of claim 2, wherein said sharing ratio comprises distribution for the tax-advantaged period of the fund in proportion to each equity member'"'"'s respective capital contribution.

5. The tax-advantaged investment fund of claim 1, wherein the at least one lender receives repayment based on a dual tranche structure.

6. The investment fund of claim 5 wherein said dual tranche structure comprises:

a first portion of the debt having a first amortization period of a fixed number of years based on the cash flow of the plurality of wind energy projects; and

a second portion of the debt having a second amortization period based in part upon the timing of the capital that is contributed from the plurality of investors.

7. The tax-advantaged investment fund of claim 1, wherein said at least one lender is repaid from a portion of the cash flow from the plurality of wind energy projects and/or the capital of the tax-advantaged investment fund.

8. The tax-advantaged investment fund of claim 1 comprising a plurality of business entities, each business entity having an ownership interest in at least one of the plurality of wind energy projects, wherein the fund has an ownership interest in the plurality of business entities but not directly in the plurality of wind energy projects.

9. The investment fund of claim 8 wherein said ownership interest in the plurality of business entities comprises a 100% ownership interest.

10. The investment fund of claim 8 wherein said plurality of business entities comprise business forms that enable pass-through tax treatment.

11. The investment fund of claim 1 wherein said tax-advantaged investment fund comprises a business form that enables pass-through tax treatment.

12. The investment fund of claim 1 wherein said ownership interest in a plurality of wind energy projects comprises a 100% ownership interest.

13. The investment fund of claim 1 wherein said plurality of investors comprise:

a plurality of investing members that provide a first portion of the capital, wherein said investing members receive a first shared portion of the return for the tax-advantaged years of the find; and

at least one managing member that provides a second portion of the capital, wherein said at least one managing member administers the fund and receives a second shared portion of the return for the tax-advantaged years of the fund.

14. The investment fund of claim 1, wherein said wind energy projects qualify for a generation of a plurality of Production Tax Credits in accordance with Subchapter 45 of the Internal Revenue Code of 1986 as amended, or any successor statute thereto.

15. The tax-advantaged investment fund of claim 1, wherein said plurality of wind energy projects is geographically diverse.

16. A tax-advantaged investment fund comprising:

an ownership interest in a plurality of wind energy projects having a return comprising a cash flow distribution, an accelerated depreciation deduction, a plurality of tax credits, and residual value of the wind energy projects;

equity capital for investing in said ownership interest in a plurality of business entities comprising;

a plurality of investing members that provide a first portion of the equity capital, wherein said investing members receive a portion of the return in accordance with a first sharing ratio for a tax-advantaged period of the fund; and

at least one managing member that provides a second portion of the equity capital, wherein said at least one managing member administers the fund and receives a portion of the return in accordance with a second sharing ratio for the tax-advantaged period of the fund; and

at least one lender that provides a debt component either directly to the fund and/or one of the plurality of wind projects directly and receives a distribution from a portion of the cash flow from said wind energy projects and/or said fund.

17. The tax-advantaged investment fund of claim 16, wherein said at least one lender receives repayment based on a dual tranche structure.

18. The tax-advantaged investment fund of claim 16, wherein said dual tranche structure comprises:

a first portion of the debt having a first amortization period of a fixed number of years based on the cash flow of the plurality of wind energy projects; and

a second portion of the debt having a second amortization period based in part upon the timing of the equity capital that is contributed from the plurality of investors.

19. A method for creating a tax-advantaged investment fund comprising:

forming an entity having a business form that enables the entity to passthrough tax benefits;

establishing the tax-advantaged investment fund having a plurality of investors comprising a plurality of equity members;

collecting capital from the plurality of investors; and

using the capital to purchase a plurality of wind energy projects having a return comprising a cash flow distribution, accelerated depreciation deduction and tax credits.

20. The method of claim 19 further comprising:

collecting a debt component from at least one lender; and

providing said debt component to said tax-advantaged investment fund to purchase a plurality of wind energy projects.

21. The method of claim 19 further comprising:

collecting a debt component from at least one lender; and

providing said debt component directly to one of a plurality of wind energy projects.

22. The method of claim 21, wherein said debt component comprises a dual tranche debt structure comprising:

a first portion of debt having a first amortization period of a fixed number of years based on the cash flow of the plurality of wind energy projects; and

a second portion of debt having a second amortization period based in part upon the timing of the capital that is contributed from the plurality of investors.

23. The method of claim 22 further comprising the act of repaying the debt component from cash flow generated by the plurality of wind energy projects and/or the capital of the fund.

24. The method of claim 19 further comprising providing the equity members a portion of the return in accordance with a sharing ratio for a tax-advantaged period of the fund.

25. The method of claim 19 further comprising an act of providing the capital to a plurality of wholly owned business entities in portions, wherein the wholly owned business entities perform the act of using the capital to purchase a plurality of wind energy projects.

26. A method for managing a tax-advantaged investment fund comprising:

establishing the tax-advantaged investment fund having a plurality of investors comprising a plurality of equity members;

collecting capital from the plurality of investors;

collecting a debt component from at least one lender;

determining the identity of a plurality of wind energy projects to purchase;

providing the capital and debt to the plurality of wind energy projects having a return comprising a cash flow distribution, an accelerated depreciation deduction and a plurality of tax credits.

27. The method of claim 26 further comprising providing the equity members a portion of the return in accordance with a sharing ratio for a tax-advantaged period of the fund.

28. The method of claim 26 comprising repaying the debt component from cash flow generated by the plurality of wind energy projects and/or the capital of the fund based on a dual tranche structure.

30. The method of claim 28 comprising:

providing a debt component to the tax-advantaged investment fund for investing in said plurality of wind energy projects; and

receiving repayment of said debt component from cash flow generated by the plurality of wind energy projects and/or the capital of the fund based on a dual tranche structure.

29. A method for investing in a tax-advantaged investment fund comprising:

providing capital to the tax-advantaged investment fund for investing in a plurality of wind energy projects having a return comprising a cash flow distribution, an accelerated depreciation deduction and a plurality of tax credits; and

receiving a portion of the return in accordance with a sharing ratio for a tax-advantaged period of the fund.