In the last week, developers in the global solar sector have signed a number of financial agreements to further construction and commissioning at a number of projects around the world.
In the US, Summit Ridge Energy and PureSky Energy have established financing facilities with a combined value of US$425 million, while in South Africa, Mainstream Renewable Power has reached financial close on a 97.5MW solar project.
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Mainstream reaches financial close for Free State project
Mainstream has finalised funding for its latest solar plant, a 97.5MW project to be built in the central South African province of Free State. The company plans to begin construction at the project this year, and commission the facility in 2025.
Critically, Mainstream has signed power purchase agreements (PPAs) with South African chemicals company Sasol and French gas supplier Air Liquide to use power produced at the facility. The news will be welcomed in the South African renewables sector, considering the country’s heavy reliance on the coal industry, with the International Energy Agency reporting that coal-fired electricity generation accounts for around 70% of installed power generation capacity.
This reliance on coal power has left the South African electricity grid vulnerable to blackouts and disruptions, especially in winter, and an increasing number of companies are looking to expand the country’s solar sector. The news follows the signing of a PPA between EDF Renewables and state-owned utility Eskom to build a new solar-plus-storage facility in Eastern Cape earlier this year.
Summit Ridge Energy expands MUFG partnership
Summit Ridge Energy and Japan-headquartered global financial group MUFG have announced a US$275 million expansion of their existing partnership, which has already raised US$100 million for the developer’s solar projects.
The developer announced that the latest funding would be used to aid in the construction of up to 15 community solar projects in Illinois, and the “permanent financing” of up to 15 similar projects in Virginia.
Summit Ridge Energy plans to add 45MWdc of new capacity to its Illinois portfolio, alongside 75MWdc of new capacity to its Virginia projects in 2024 alone, and the additional MUFG funding could prove to be a vital step towards realising these new developments.
Summit Ridge Energy has already invested considerably in the US’s growing community solar sector, with legislation on both the state and federal levels encouraging new solar power ownership models that is helping drive a rapid change in the US’s energy mix. According to the Solar Energy Industries Association (SEIA) and Wood Mackenzie, the US is expected to add 236GW of new solar capacity in the next five years.
“The Inflation Reduction Act (IRA) is changing the way the market is behaving through the commitments made to low-income families and energy producing communities,” Leslie Elder, Summit Ridge Energy vice-president of political and regulatory affairs told PV Tech, drawing attention to the importance of the IRA in encouraging such new investments.
“As a result, solar and storage projects have a greater opportunity to serve more customers, create new family-sustaining jobs, use American manufactured products, and save consumers money on their monthly electric bills. This is all positive momentum, especially for the community solar market, but most importantly for the individuals and businesses interested in the benefits of low-cost clean energy.”
PureSky closes revolving credit facility
Another community-focused US developer, PureSky Energy, has closed a three-year US$150 million revolving credit facility, led by another Japanese financial company, Nomura. The developer announced that the funding would be used to support “interconnection and equipment financing”, for both the company’s greenfield developments and acquired projects.
The news follows PureSky’s acquisition by Canadian financial groups Fiera Infrastructure and the Palisade Infrastructure Group in June this year. This deal involved the changing of the name of the company, which is the US division of Canadian energy firm Amp, to PureSky, and those involved in the deal have stressed how the latest round of funding demonstrates their commitment to the expansion of the US solar sector.
“Together with the support of our new shareholders, this financing provides us with the ability to further accelerate the buildout of our operating portfolio, including via targeted mergers and acquisitions of project portfolios at earlier stages of development, which require significant capital to advance interconnection and permitting activities,” said Jared Donald, PureSky president and CEO.