Financing Committed for Major California, Texas Solar Projects
Credit to Author: Darrell Proctor| Date: Thu, 29 Sep 2022 18:26:46 +0000
Four large solar power projects, including two that will feature battery energy storage systems (BESS), are moving forward after the closing of financing commitments for the installations.
Intersect Power, an Oregon-headquartered development and engineering group for renewable energy, on Sept. 29 announced it has closed $3.1 billion in financing to complete a near-term portfolio of projects totaling more than 2 GW of generation capacity.
The deal includes $2.4 billion of new financing commitments, and the allocation of $675 million of previously announced commitments, for construction and operation of solar projects with about 1.5 GW of solar photovoltaic, and about 1 GW of battery energy storage. Intersect on Thursday in a news release wrote, “The transactions represent construction financing, tax equity, operational letters of credit and a portion of previously announced portfolio level term debt with industry-leading partners.”
The four projects—Lumina I and II in Texas, and Oberon I and II in California—are expected to come online next year. The Texas projects total about 840 MW of capacity; the California installations will have about 685 MW of solar output, along with a 1-GW BESS.
“These closings culminate a multi-year process raising more than $6 billion to build out one of the largest solar + storage portfolios our country has seen to date, which serves as a platform for future growth into green hydrogen and other decarbonization technologies,” said Sheldon Kimber, CEO of Intersect Power, who is based in the San Francisco Bay Area. “The strength of our partnerships and collective teams’ determination further validates our path to decarbonize the hard-to-reach corners of the economy.”
Financing Deal
Intersect Power previously had announced a $2.6-billion financing deal in November of last year, for several projects, including those in Thursday’s deal. The company said, “these financings follow the company’s approach by incorporating structuring and pricing provisions designed to account for the higher proportion of uncontracted revenue in the portfolio. Proceeds from the term facility will support both construction and operation of the portfolio.”
The Bureau of Land Management (BLM) earlier this year issued final approval for construction of the Oberon solar project. The agency said the project is located on about 2,600 acres of BLM-managed land near Desert Center in eastern Riverside County, California.
The Lumina solar parks are located in Scurry County in Texas.
Intersect on Thursday said MUFG and Santander served as co-lead arrangers on the approximately $1.6-billion construction financing. NORD/LB, KeyBanc Capital Markets, Helaba, CoBank, Bank of America, and Zions Bancorporation acted as joint lead arrangers. CoBank ACB is providing operational letters of credit to the Oberon I and II, and the Lumina II, projects.
‘Transformative Renewable Energy Projects’
“Intersect Power has robust capabilities as a developer of transformative renewable energy projects,” said Louise Pesce, managing director of Project Finance at MUFG. “We are honored to be a financing partner for this phase of their large solar plus storage portfolio which will catalyze the transition to a more sustainable energy infrastructure.”
Nuno Andrade, managing director and head of Structured Finance US at Santander’s Corporate & Investment Banking, said, “We are very proud to have supported Intersect in this transformative capital raise process in such a meaningful way. Intersect continues to position itself as an innovative company that develops renewable energy projects at scale to provide clean energy and U.S. jobs, both of which are critical for the economy and the energy transition.”
“CoBank was pleased to work with the Intersect Power team to provide operational letters of credit on a bilateral basis under an innovative structure to the Oberon I, II and Lumina II projects of the portfolio” said Jackie Bove, managing director and head of project finance at CoBank, ACB.
Intersect, concurrent with the closing of construction financing, secured about $775 million of commitments from leading tax equity investors, including Morgan Stanley Renewables Inc. (Oberon II), a Fortune 100 technology company (Lumina I), and U.S. Bank (Oberon I and Lumina II).
“We’re excited to partner with Intersect Power to grow solar capacity and storage with these investments in California with Oberon I and Texas with Lumina II,” said Jon Peeples, environmental finance business development director with U.S. Bancorp Community Development Corp., the tax credit and community investment division of U.S. Bank. “Investments like these are a tangible way U.S. Bank can be a responsible steward of the environment and combat climate change while creating jobs and positively impacting local communities.”
“We are proud to again partner with Intersect Power by providing them capital to help accelerate their scalable and innovative approaches to decarbonizing energy sources,” said Jorge Iragorri, managing director and head of the Alternative Financing Group at Morgan Stanley.
The allocation of $675 million of previously announced term-loan commitments was provided by HPS Investment Partners and Co-Investors.
—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).
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