Financing on a scale not previously seen for an integrated solar and energy storage project involving revolving letter of credit (L/C) facilities has led to the activation of the largest solar-storage project in the US, according to project developer Terra-Gen and its engineering, procurement, and construction contractor, Mortensen.

The Edwards & Sanborn solar and energy storage project located in California consists of 875 megawatts of solar and 3,320 megawatt-hours of energy storage. It is currently the largest single solar and battery energy storage project to reach this milestone.

Phase one financing

Financing for phase one of the project arranged in 2021 included US$804 million senior secured credit facilities comprising a US$400 million construction and term loan facility, a US$328 million tax equity bridge facility, and a US$76 million construction and revolving L/C facility.

JP Morgan provided the tax equity commitment for the initial phase of the project. Deutsche Bank led the construction and term financing and also acted as sole bookrunner and joint lead arranger along with BNP Paribas and ING Capital serving as joint lead arrangers.

Innovative financing

Terra-Gen's chief financial officer, John O'Connor, said at the time that the solar developer valued the creativity and innovation that the financing counterparties brought to the table.

"Working collaboratively, we were able to structure and deliver financing on a scale not previously seen for an integrated solar and energy storage project," he said.

Phase two financing

The financing for the second phase included US$959 million senior secured credit facilities comprising a US$460 million construction and term loan facility, a US$403 million tax equity bridge facility, and a US$96 million construction and revolving L/C facility.

US Bank provided the tax equity commitment for the project, with BNP Paribas, CoBank, ING, and Nomura Securities leading the construction and term financing.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.