It’s true that nothing in life is free, and in lending, nothing is borrowed for free, either. Lenders are only interested in sharing their assets if they are confident it will pay off and be paid off. So how can you show your project is a safe bet? When obtaining financing on a large-scale renewable energy project, your lender will likely request a lender’s Mortgage Opinion and a Permit Opinion.

These opinions will confirm the lender’s ability to secure their loans properly and your ability to properly construct the project in light of local, state, and federal requirements. Moreover, these opinions will assure a lender that no pre-existing encumbrances will prevent the fulfillment of your planned project, thereby ensuring your ability to repay your loan. Are there liens, deeds of trust, or mortgages that will wipe out your lender’s interest if they are foreclosed? Do any other parties have rights to your property that will interfere with your ability to fulfill your planned project, such as through easements or oil and gas leases? Are you aware of the permits and approvals necessary to operate as you’ve planned? lenders will want definitive answers to these questions to ensure their money is well spent – and will be returned as agreed.

Each project bears its own attendant risks due to local or regional differences in necessary permits, and the due diligence associated with reviewing these opinions can be voluminous depending on the jurisdictional requirements. Likewise, coordination with lender’s counsel can be tedious as the parties work through title issues and coordinate documentation throughout the closing process. A master project checklist must be developed and adhered to throughout the transaction in order to properly coordinate closing and delegate necessary tasks over a long time horizon with critical delivery dates.

That being said, there is nothing worse in a transaction than finding out at the last possible minute that there is an insurmountable hurdle that holds you up from closing. The loan process is a long and arduous one, and you’ve sunk time, money, and stress into a project that won’t come to fruition for a preventable reason. It’s your nightmare and ours too! RR&A has the necessary experience and expertise to proactively identify issues before they escalate and negotiate with the lender’s counsel to avoid failure.