11 Sep Navajo Power

Navajo Power

Interview with Brett Isaac, Fund Founder and Executive Chair

How was Navajo Power Created?

Brett: Navajo Power is a majority native owned company that was founded to help address the catastrophic economic impact of the decline of the coal-based economy on the Navajo Nation by developing utility-scale renewable energy projects that bring benefits (revenues, jobs, equity ownership)to tribal communities and governments, and which can help provide a foundation for an economic transition. While the Navajo Nation was the initial focus of activity, the broader vision was to support Tribal communities across the country that have the desire to prosper from the transition to an economy based on renewables. The company was founded by Brett Isaac, Clara Pratte and Tony Skrelunas – members of the Navajo Nation and long-time economic development professionals, in partnership with Dan Rosen and Josh Finn – solar finance entrepreneurs with a track record of founding companies and financing solar projects.

Jen: How are your investment funds catalytic in a way that is different from other funds?

Brett: Navajo Power invests its development capital and its team’s time and effort into developing projects sited only on Tribal lands. For any other solar developer working with Tribes, Tribal lands projects might be a small part of a bigger strategy that they are pursuing. However, Navajo Power is all-in and completely committed to developing on Tribal lands. As a result, the company has a longer-term horizon on project development expectations than other developers – we know it might take more time for these opportunities to come to fruition than private land opportunities. Crucially, Navajo Power creates long- term project equity ownership opportunities (at least 49%) for Tribal partners in all of the projects we develop. Rather than allowing Tribal ownership as a concession if a Tribe insists, we are focused on making this an option from day 1 of project development and also helping Tribes to leverage funding available to finance their equity ownership such as Department of Energy Loan Guarantees. Navajo Power also negotiates with power buyers and project owner-operators with the goal of maximizing benefits to the Tribe. Given the complexity, lack of resources and technical expertise in the Tribal context, Navajo Power’s focus and approach both catalyzes the opportunity to participate in infrastructure development that would otherwise allude many Tribal communities, while also centering the interests of the communities themselves in the development process.

Jen: How do you describe the kind of non-financial returns the fund offers?

Brett: The first order non-financial returns are laying a foundation for robust community economic development in Tribal Nations through developing infrastructure, all while decarbonizing the energy supply and broader economy.

Jen: Can you describe how you use integrated capital to do your work?

Brett: Navajo Power is a developer that invests in the riskiest stages of project development – prospecting
and early stage activities such as securing site control, engineering, permitting and interconnection into the power grid. The Company has to invest its employees’ time and resources in technical assistance and building the capacity in local communities and governments, such as guiding tribal permitting agencies and tribal governments to set up regulatory frameworks that both maximize benefits while working with

the realities of the energy development market. In our current $20M capital raise, we have a blended finance approach where we are seeking a mix of equity from Tribal and infrastructure investors and long- term concessionary debt from philanthropists and impact investors to power the company’s growth strategy with the necessary patience to work with Tribal communities. Our team also uses our social /political capital to connect Tribal partners to external resources, such as a $2M USDA grant that we helped the Navajo Hopi Land Commission win, which will fund off-grid solar for homes in need on the Navajo Nation.

Jen: How do you address racial justice, income inequality, and/or gender justice through your products and services?

Brett: Navajo Power only works with Tribal Nations. Every successful project will generate hundreds of millions of dollars of economic activity for Tribes through taxes, lease revenues, labor wages and create opportunities to invest in the long-term ownership of the new energy infrastructure. Each project is also one step closer in decarbonizing the energy supply and broader economy. Navajo Power is also majority Native-owned and Native-led, which ensures that the priorities of Native American leaders are driving corporate strategy. Navajo Power is committed to hiring, training and mentoring the next generation of
Native American renewable energy professionals. As projects advance they create attractive investments in BIPOC communities historically underserved by commercial institutions and open new markets to bring capital into these regions.

Jen: Can you share with us an example of an investment?

Brett: Painted Desert Power is a 750 megawatt solar project located in Northeastern Arizona on the Navajo Nation. If completed at full capacity, the project will be a $1.7B capital investment and produce windfall revenues for the local Tribal stakeholders and local Tribal governments that host the project, and for the Navajo Nation government. A hiring preference is in place for members of the Navajo Nation for the large number of short term construction jobs and long-term operational jobs. The Navajo Nation will have the opportunity to invest in the long term ownership of the project, reaping returns over the 25-35 year life of the project.

Jen: What do you tell people who think your fund is risky?

Brett: The company measures success by the number of projects developed, and the number of dollars and other benefits brought to Tribal communities. Each project possesses the Navajo Power DNA of maximizing economic benefits for the partner Tribe. Every megawatt of power developed by Navajo Power is one that would otherwise not be developed at all, or would be developed in a manner that maintains the paradigm of profit maximization for external ownership. It is also necessary for Tribal
Nations – which comprise 6% of the US landmass and up to 7% of its renewable energy resources – to participate at scale in the transition for the US to meet its decarbonization goals, which won’t happen if these Nations aren’t met on their terms and their timelines. Some risks are essential to be taken.

Investment Thesis/What is your rationale for your approach to investing?

We are a project developer, not a fund per se, though we do create and invest in a portfolio of assets. We invest in the creation of utility-scale renewable energy projects on Tribal lands with the mission of maximizing the economic benefits for the Tribes that host the projects.

Geography: Currently our project development efforts are focused on the Southwest and Pacific Northwest. We are seeking to expand to other regions this year.

Year Founded: April 2018

# of Investments: 9

# of Investors: 35 (donors, funders, supporters, investors)

Funds Raised: ›10,400,000 since inception

What’s on Brett’s Mind?

Book: Leadership Strategy and Tactics, Jocko Willink

Song: Comin’ home – City and Colour

Podcast: How I Built This