Alternative Finance

PFM has established a clear focus and leadership position in managing the growing use of private capital to support economic development and other purposes for mission-driven clients.

These projects require a careful balancing of the risks and rewards associated with private capital, and objective analysis of the best mixture of public and private sources. To the extent private capital is useful, PFM supports its clients in mitigating risks, in negotiating agreements with developers, and in managing transactions toward successful closings. When appropriately used, private sources can reduce reliance on scarce revenue sources, and assist in creating long-term economic growth. 

PFM supports public jurisdictions and non-profit clients in qualifying, selecting and negotiating with developers. We have been a reliable partner on many projects of this type, and bring both our financial and our procedural knowledge to the table on our clients’ behalf.

This process must be started with clear objectives that can guide the process to conclusion. We help ensure that developers provide full disclosure of their capacity, conflicts and experience. We provide in-depth analysis of their financial capacity, their pro formas for projects and the risks associated with their approaches. Once selected, we support the development of thorough and thoughtful contractual arrangements that mitigate our clients' risks and maximize their return on investment. PFM helps manage this process efficiently to ensure that market opportunities are captured on a timely basis.

PFM helps municipalities and non-profit institutions devise strategies for how to manage real estate assets without undervaluing or foregoing benefits that the private sector might enjoy if they were to own the assets.

We also help our municipal clients understand the considerations associated with monetization, such as the sale or long-term lease of utility, parking or other revenue generating assets. While the sale of an essential purpose asset like a sewer or water system can be complicated, understanding the motivations for such a monetization is critical in designing appropriate transactions that meet our clients’ objectives. Many factors, such as the desire for local control, the acceleration of deferred maintenance, and user rate stability often have to be balanced in order to arrive at successful transaction terms. PFM alternative finance professionals know how to get these or other features into related transaction documents for the benefit of our clients and the stakeholders they serve.

Combining cutting edge environmental finance transaction structures with decades of experience in utility project economics and our public finance expertise, we assist clients nationwide in implementing projects that often provide energy and water cost savings in excess of debt service.

We have extensive experience with programs dedicated to creating and implementing green projects and initiatives ranging from energy efficiency improvements, to water efficiency installations to renewable energy and climate-resilient infrastructure and implementation to name a few.

We partner with clients to structure and implement financing tools including Property Assessed Clean Energy (PACE), revolving loan funds, power purchase agreements (PPAs), energy service performance contracts (ESPCs) and Energy Services Agreements (ESAs), lease-purchase agreements, on-bill financing, and municipal and green bonds. Our commitment to innovative and cost-saving solutions benefits both our clients, and the environment as a whole.

In today’s environment, companies often shop their potential investments among several locations and expect municipalities to compete for their business. Municipalities with the most effective tax policies are often the long-term winners.

From the state level down to local jurisdictions, PFM helps our clients develop policies that are reasonable, potentially attractive to the private sector, and protective of our clients’ long-term financial interests.