Double financing deal continues Texas’ utility-scale solar run

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The Holstein solar project in Texas, completed by 8minute Solar Energy earlier this year. Image: 8minute Solar Energy.

Two more utility-scale solar projects in Texas with a combined capacity of more than 400MWdc have closed financing, continuing the Lone Star state’s booming solar run.

US-based developer Longroad Energy announced financial close and the start of construction at its Prospero 2 solar project, a 331MWdc solar farm in Andrews County. Located adjacent to Longroad’s existing Prospero 1 project, the array is slated to come onstream in Q2 2021.

The project will combine First Solar’s Series 6 panels with inverters from Power Electronics and Nextracker mounting structures. Engineering, procurement and construction will be conducted by Swinerton Renewable Energy.

Construction and term lending was led by CIT Group, while fellow financiers Zions, Rabobank, HSBC, Commerzbank, Siemens Financial Services and National Australia bank participated in the lending group. US Bank is the sole tax equity investor in the project.

Financing is underpinned by two 15-year power purchase agreements which cover the project’s generated power. Those have been signed with DaVita, which has previously signed PPAs with Longroad, and a subsidiary of Zimmer Biomet Holdings.

“It’s always tough finalising deals, but even more so in today’s challenging market. We want to commend our lead lending and tax equity partners, US Bank and CIT Group, for being especially constructive and supportive throughout the process,” Peter Keel, CFO at Longroad, said.

In closing Prospero 2, Longroad has taken the total capacity of wind and solar projects developed, financed and built by the company in Texas to beyond 2GW.

The development followed news from earlier this week that Pattern Energy had closed financing and started construction on a Texan solar project of its own.

The 105MWdc Phoenix Solar Project, located in Fannin County, will also use First Solar’s Series 6 modules and Nextracker trackers, while Mortenson Construction will provide engineering and construction services.

ING Capital has provided construction and term project financing for the project, while RBC Community Investments, a subsidiary of RBC, has provided tax equity.

Mike Garland, CEO at Pattern Energy, described the Phoenix Solar Project as a “win-win” for residents of Fannin County. “Clean energy projects make sense for communities because they are the cheapest form of new power and their investments return jobs, growth and positive economic impact in the rural areas where they are developed,” he said.

The double dose of project financing news comes amidst a flurry of solar activity in the Lone Star state, which is emerging as a particularly attractive destination for solar investment. Last month saw Japanese utility Tokyo Gas enter the market with a 500MWac project acquisition, with the likes of Duke Energy, Lightsource BP and RWE all completing or commencing projects in Texas since the turn of the year.

Analysis compiled last month by the Institute for Energy Economics and Financial Analysis concluded that a surge in new utility-scale solar will push much of Texas’ remaining coal-fired plants into retirement in the next few years, such is the pace of deployment and economic advantage.

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