(Bloomberg) -- Two French energy companies are taking a novel approach to using a rule in the US Inflation Reduction Act to spur more clean power by transferring tax credits.

Schneider Electric SE will pay $80 million to acquire tax credits, which in turn will help fund four Engie North America projects that are slated to come online in Texas this year, said John Powers, vice president of global cleantech and renewables at Schneider. Schneider will then use the tax savings to buy 110,000 megawatt hours of renewable energy credits annually — for an undisclosed amount — from Engie’s projects over 10 years. The companies say this is the first time a financing arrangement pairs the tax credit transfers with renewable credits.

A traditional tax equity deal would have required a company like Schneider to take an ownership stake in the projects for at least five years. Where tax equity might appeal to two dozen or so Fortune 500 companies, primarily banks and insurers, buying credits without a stake could widen that investor pool to 400, Powers said. 

“The ability to do tax credit transfer from the IRA means that more projects will be built and more clean energy will be put on the grid,” said Laura Caspari, senior vice president of power marketing and commercial strategy at Engie North America. “It accelerates the whole energy transition in the United States.” 

(Company corrects statement on the kind of transfer in the final paragraph.)

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