Lightsource bp funds 288MW solar PV portfolio in Texas, uses IRA’s transferability provisions

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Lightsource bp 163MW solar PV plant in Texas
Lighstource bp has three operational solar PV plants in Texas, including the 163MW Elm Branch (pictured above). Image: Lightsource bp.

Solar developer Lightsource bp has closed a US$348 million financing package to support the construction of a solar portfolio in Texas, US.

Construction is underway and comprises two projects, a 163MW solar PV plant – Starr Solar – in Starr County and a 125MW PV plant – Second Division Solar – in Brazoria County. Both projects are expected to be operational in 2024.

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Once operational these projects will increase the operational solar capacity of the company in Texas, which currently sits at 576MW between three solar PV projects, Impact, Elm Branch and Briar Creek Solar.

According to Emilie Wangerman, head of US and interim chief operating officer at Lightsource bp, this is the company’s first transaction to benefit from the transferability provisions of the Inflation Reduction Act.

Simms Duncan, senior vice president, structured finance at Lightsource bp, added: “We also believe that this deal is the first US renewable energy project finance transaction to include both a transferability bridge loan and an equity partner bridge loan, allowing Lightsource bp and its lenders to maintain their positions as market leaders.”

French financial services group Société Générale served as coordinating lead arranger for the financing of these two projects, which marked the sixth transaction between the companies. Other lenders in the transaction were UK-based financial entities NatWest and Lloyds Bank, Dutch financial services corporation ING and Irish banking company Allied Irish Banks. All of these entities have made previous financing transactions with Lightsource bp.

Financing solar projects in Texas has seen increased activity lately. This week alone, Spanish renewables developer Greenalia closed US$200 million in three-year credit facilities to support a 1.9GW portfolio of solar PV, wind and storage projects, while French energy firm Schneider Electric invested in a portfolio of solar-plus-storage projects in Texas from French utility Engie through a tax credit transfer agreement (TCTA).

Since the US Department of Treasury and Internal Revenue Service (IRS) released guidance on tax credits included in the Inflation Reduction Act (IRA) in June 2023, solar transfer agreements have been booming in the US. Last year alone, between US$7 and US$9 billion in clean energy transferable tax credit transactions were made, according to a report from Crux, an ecosystem for entities to transact and manage transferable tax credits.

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