Ashtrom Renewable Energy, an independent power producer that is a subsidiary of the Ashtrom Group, an Israeli construction firm, has raised US$270 million in funding for its 400MWdc Tierra Bonita solar project in the US state of Texas.
Financing for the project was provided by a group of five banks: BHI, the US subsidiary of the Bank Hapoalim Group; Germany-based Bayerische Landesbank; Dutch banks ING and Rabobank; and French investor Société Générale.
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Ashtrom Renewable Energy also agreed to sell the production tax credits generated by the project under the Inflation Reduction Act, the landmark legislation that has sought to encourage domestic US renewable power generation, to what it called a “highly rated US institutional entity”. The company values these tax credits at around US$300 million.
“The financial closing of the Tierra Bonita project marks a significant milestone for Ashtrom Renewable Energy, demonstrating confidence in our strong capabilities to execute the development, planning, financing and construction of our first large-scale solar project in the US, with a total investment of approximately $435 million,” said Yitsik Mermelstein, Ashtrom Renewable Energy CEO.
The project is currently under construction in Pecos County in south-west Texas, and Ashtrom Renewable Energy expects to begin commercial operations in the fourth quarter of 2024.
Ashtrom Renewable Energy has a total of 1.8GW of renewable power under development in the US, alongside 541MW of capacity under development in Greece, 99MW in Israel and 28MW in Poland, and the Tierra Bonita project is its largest in the US by capacity. The project is also the most mature of its six US renewable projects currently under development, and the successful funding of this facility could encourage greater investments in Ashtrom Renewable Energy’s US portfolio.
The news follows Recurrent Energy’s raising of around US$200 million for its 134MW Liberty solar project, which is also under construction in Texas, and received backing from Rabobank. Continued interest in building new US solar facilities has helped contribute to consistent growth in the US solar sector, that has seen the industry’s power capacity increase at a more sustainable rate than other renewable power sources.