Doral Renewables: Leveraging Letters of Credit to Fuel Renewable Expansion

Doral Renewables LLC has taken a significant step toward scaling its renewable energy ambitions with the announcement of a $100 million corporate Letter of Credit (LOC) facility arranged by HSBC. This move, which brings Doral’s total LOC capacity to $285 million, underscores the strategic role of financial guarantees in advancing large-scale renewable projects. The facility directly addresses the company’s need to secure interconnection obligations and power purchase agreements (PPAs), critical for transforming solar and wind projects from blueprints to operational assets.

At the heart of this transaction is HSBC’s role as sole arranger and issuing bank—a partnership that reflects Doral’s growing reputation as a credible player in the clean energy sector. The LOCs act as financial instruments to guarantee Doral’s commitments to grid operators and energy purchasers, de-risking projects at a time when renewable infrastructure faces mounting competition for interconnection queues and long-term PPA contracts.

The Great Bend Solar Project: A Microcosm of Doral’s Strategy

One of the key projects benefiting from this LOC expansion is the Great Bend solar facility in Ohio. A 48 MWac ground-mounted project using single-axis tracking technology, Great Bend exemplifies Doral’s focus on maximizing energy yield and financial returns. The project secured $30 million in tax equity financing from Fifth Third Bank, a first-time partner, and is expected to generate enough electricity for 9,000 homes. Its dual revenue streams—energy sales and renewable energy certificates (RECs)—are underpinned by a long-term PPA with a major U.S. utility, ensuring stable cash flows.

Beyond immediate revenue, Great Bend delivers broader economic benefits, including over $400,000 in annual tax revenue for Meigs County. This aligns with Doral’s stated mission to blend environmental impact with community development. The project’s success also hinges on innovative financing: a tax credit transfer transaction, enabled by recent federal clean energy policies, will further optimize returns later in 2025.

Financial Leverage and Portfolio Scale

Doral’s total renewable portfolio now spans 16 GW across 20 U.S. states, with 400 MW operational and 950 MW under construction. The $2.5 billion in long-term wholesale PPAs secured by the company provide a critical anchor for its revenue streams. The $285 million LOC capacity, coupled with tax equity partnerships like that with Fifth Third, positions Doral to accelerate its pipeline without over-leveraging its balance sheet.

Risks and Opportunities on the Horizon

While Doral’s financial engineering appears robust, risks remain. Rising interest rates and supply chain constraints could pressure project economics, though the LOC structure mitigates execution risks. Additionally, the company’s reliance on federal tax incentives introduces policy dependency—a vulnerability if legislative support wanes.

Yet Doral’s partnerships and diversified financing approach mitigate these risks. Its collaboration with Fifth Third, described by CFO Evan Speece as a “foundation for future growth,” signals access to new capital pools. Meanwhile, HSBC’s commitment reinforces institutional confidence in Doral’s project execution capabilities.

Conclusion: A Blueprint for Renewable Growth

Doral Renewables’ $100 million LOC facility and its broader financial strategy demonstrate a clear path to scaling renewable energy infrastructure. With $285 million in LOC-backed guarantees, $30 million in tax equity, and $2.5 billion in PPAs, the company is well-positioned to capitalize on the $1.7 trillion in clean energy investments projected for the U.S. through 2030.

The Great Bend project alone illustrates the model: leveraging technology (single-axis tracking), financing (tax equity + LOCs), and policy (tax credit transfers) to create projects that are both profitable and socially beneficial. As Doral expands its operational capacity to over 1,300 MW by year-end, its financial resilience and strategic agility—backed by major institutions like HSBC and Fifth Third—signal a compelling investment thesis. For stakeholders in renewable energy, Doral’s 2025 moves are not just about securing credit facilities—they are about securing a leading role in the energy transition.