Renewable energy financier Excelsior Energy Capital has closed US$1.3 billion in financing for its recently-acquired 682.5MW Faraday solar PV project in Utah County, Utah, US.
The financing came from a number of sources, including US$400 million in tax equity from US Bancorp Impact Finance, the tax credit investment subsidiary of US Bank, through the production tax credit (PTC) offered as part of the Inflation Reduction Act (IRA). The PTC offers renewable energy projects a roughly 30%-equivalent tax credit for the power they produce.
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MUFG and Nord/LB acted as lead arrangers for a further US$460 million loan, a US$300 million tax equity bridge loan and US$250 million in ancillary services.
The Faraday project itself is currently under construction and due to enter operations in Q3 2025. A long-term power purchase agreement (PPA) is in place with western US utility PacifiCorp, which will ultimately supply the power to social media giant Meta to power its operations. Meta is one of the largest corporate offtakers of solar power in the US, following its recent signature of a PPA for a 240MW PV site in Texas.
Excelsior bought the project from developers Parasol and Clenera earlier this year through its Excelsior Fund I investment fund. Closed in January 2021, Fund I is the company’s maiden flagship fund, with US$504 million available for renewable energy acquisitions. It is now fully deployed, Excelsior said, constituting 1.9GW of renewable generation projects across ten US states, and the Faraday investment represents the largest chunk of capital.
“The acquisition and financing of the Faraday transaction was the result of an immensely collaborative effort with Parasol and Clenera, Excelsior’s innovative financing approach, and the efforts of our exceptional team,” said Jason Frooshani, head of mergers and acquisitions at Excelsior.
Largely as a result of the PTC – from which Excelsior benefitted in this financing – and investment tax credit (ITC), the IRA is forecast to stimulate a period of growth for US solar that could see it account for around 60% of US electricity consumption by 2030, according to March research from the National Renewable Energy Laboratory (NREL).