Dive Brief:
- BlackRock’s Global Infrastructure Partners led a $250 million expansion of energy-as-a-service company Budderfly’s debt facility, the EaaS provider announced Wednesday. London-based investor Vantage Infrastructure, an existing Budderfly lender, also contributed to the funding.
- The expanded debt facility also includes an $100 million "accordion feature,” or option to increase the financing, and expands the company’s current total debt facility to $550 million, Budderfly said in a press release.
- Budderfly, which offers energy modernization services to commercial facilities at no upfront cost, said in Thursday’s release that the funding will be used to accelerate the deployment of energy infrastructure it owns across the U.S.
Dive Insight:
Energy-as-a-service models like Budderfly’s are among a variety of service-based models facility managers are increasingly turning to for cost reductions and environmental benefits.
Budderfly said it’s looking to expand its EaaS services, which involves investing in energy efficiency and saving technologies and clean energy deployment, across U.S. mid-market commercial facilities, according to the release. The company has previously estimated that U.S. small and mid-sized businesses spend $55 billion on electricity annually.
Budderfly’s EaaS model, where the company signs 10-15 year service agreements to find companies efficiency and savings upgrades is “capital-intensive,” CEO Al Subbloie said in the release, adding that the expanded financing commitment from GIP and Vantage was “critical to scaling.”
“This expansion of our debt facility strengthens our ability to own the upfront investment, manage performance over time, and deliver measurable energy and cost-saving outcomes for our customers,” Subbloie said. “It reflects confidence in our model and positions us to continue removing friction for commercial operators as they modernize and decarbonize their facilities.”
In addition to Vantage, private equity firm Nuveen is a prior lender for the company’s debt facility, and remains “a significant participant,” Budderfly said in the release. The EaaS provider said its current capital base also includes $500 million in equity financing, which it announced in 2022.
Budderfly, whose clientele targets a wide array of commercial facilities — including restaurants, hotels, retail and convenience stores — announced a deal in the fall to expand its presence with manufacturers as well. The EaaS company announced a deal with OEM Controls in September to install rooftop solar and replace 18 heating, ventilation and air conditioning units at the electrohydraulic control systems manufacturer’s Connecticut facility.
For BlackRock’s GIP, the announced lending deal followed agreements this month to purchase airport ground support equipment leasing company TCR and lead a consortium of investors in acquiring clean energy developer AES. GIP, which BlackRock acquired for $12.5 billion in 2024, also purchased a controlling stake in the carbon capture, utilization and storage business of Italian energy company Eni last year.
