US solar developer Primergy has secured US$588 million in financing for its 408MWac Ash Creek solar-plus-storage project in the US state of Texas.
The funding takes the form of a construction loan, tax credit transfer bridge loan and letters of credit, and has been provided by a number of organisations, including Japanese bank MUFG and international bank SMBC. The banks are joined by several “coordinating lead arrangers”, including BNP Paribas, Commerzbank AG, Crédit Agricole Corporate and Investment Bank, ING Capital, KeyBanc Capital Markets, Norddeutsche Landesbank Girozentrale, New York Branch and Rabobank.
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In addition, Primergy has signed a power purchase agreement (PPA) to sell all of the power generated at the project to US technology giant Microsoft, but did not specify the financial details of this arrangement.
“Ash Creek aligns with Primergy’s mission to invest in well-located projects that offer regional diversity to our portfolio and serve the needs of leading corporate customers,” said Primergy CEO Ty Daul. “Our team is extremely grateful for our continued partnership with prominent clean energy project financiers to make this a reality and are proud to work with Microsoft on meeting its sustainability commitments.”
Primergy has enlisted US firm SOLV Energy to provide engineering, procurement and construction (EPC) services for the project. Construction is already underway, and the developer expects to finish construction within 12-18 months, which includes a 300MW battery energy storage system (BESS) at the project.
The news follows Primergy’s close of a US$300 million debt and tax equity investment for a solar project in Arkansas, as the developer looks to grow its portfolio of US solar projects. The US Energy Information Administration expects the US to add 36.4GW of new solar capacity in 2024, and the continued commissioning of projects, such as those in Primergy’s portfolio, will be essential if the US is to meet this forecast.
The deal is also Microsoft’s latest involvement in a solar project, with the technology giant having signed a number of PPAs in recent months to meet its electricity demand with renewable power. These include a deal with Recurrent Energy for a solar project in Louisiana, signed in February, and an agreement with Apex Clean Energy for a solar farm in Ohio.