Canada's Innergex Renewable Energy is using a letter of credit (L/C) in the financing package it has arranged for its 250 megawatt photovoltaic solar project that, when completed, will be the largest of its kind in the US state of Texas.

Full notice to proceed with construction of the Phoebe solar project has been issued according to Innergex and commercial operations should begin in the third quarter of 2019.

Financing arrangements

Total construction costs are estimated at US$397 million and will be partly financed by a US$292 million construction and long-term project financing led by the Energy Finance unit of CIT Group Inc.

Innergex will fund its US$105 million equity commitment after the debt is fully drawn. This obligation will be supported by the issuance of an L/C.

Recent acquisition

The project has a 12-year power purchase agreement with Shell Energy North America, which is Shell's North America wholesale energy marketer and trader.

Innergex recently acquired the Phoebe project from US-based renewables developer, Longroad Energy Partners.

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