ENERGY STORAGE

Arevon & Blackstone reach $350m financial close on 800MWh Californian storage project

February 14, 2024

Renewable energy developer Arevon Energy and Blackstone Credit & Insurance have reached $350 million financial close on the 200MW / 800 MWh Condor Energy Storage Project, currently under construction in Grand Terrace, California.

The project is anticipated to start operations in Q2 2024 and is contracted under a 15-year agreement with Southern California Edison.

The financing includes a commitment from Stifel Financial Corp. to buy investment tax credits and is supported with a $164 million debt facility which was secured with coordinating lead arrangers CoBank ACB, Helaba, and Sumitomo Mitsui Banking Corporation. The Bank of New York Mellon served as collateral and administrative agent. Arevon secured real estate financing from climate investment firm HASI related to the Condor Energy Storage Project land.

Condor features Megapack 2 XL, Tesla’s utility-scale battery system – Tesla has also been contracted to provide O&M services for the project. Rosendin Electric, Inc. is the project’s engineering, procurement, and construction (EPC) contractor. Arevon will own and operate the project on a long-term basis.

Blackstone’s preferred equity investment in Condor is “structured to simplify the monetization of tax credits, eliminating the need for traditional tax equity financing,” a Blackstone statement said.

Zachary Rubenstein, managing director in the Blackstone Credit & Insurance Sustainable Resources Group, said: “Arevon is a world-class renewable energy company, and we are excited to be their partner on the Condor financing. Blackstone continues to see tremendous need for large scale financing solutions in the energy transition market, and we look forward to partnering with Arevon on future opportunities.”

Daniel Murphy, director of project finance at Arevon, added: “Condor represents not only our commitment to developing assets that deliver grid resilience but also our team’s adeptness in navigating complex, hybrid financing arrangements. Along with our partners, we remain focused on pioneering climate finance solutions that promote a sustainable clean energy future.”

Christian Jagenberg, EVP & general manager at Helaba New York Branch commented: “Helaba is very pleased to support Arevon and its Condor battery energy storage project, which we expect to play an important role in California’s ongoing efforts to decarbonise its electric system.”

Kevin Smith, Arevon CEO, said: “We appreciate our partnership with Blackstone Credit and Insurance, a leading player in providing efficient solutions in the renewable energy market, along with our other valued partners, who played pivotal roles in navigating the intricacies of this transaction. Together, we have forged a path toward sustainable energy solutions, and we extend our sincere thanks to all involved for their dedication and expertise.”

Stoel Rives represented Arevon as sponsor transaction counsel and CRC-IB served as sponsor tax equity advisors. Milbank LLP served as the preferred equity counsel, and Winston & Strawn LLP served as lender counsel. Monarch Private Capital served as advisor to the tax credit purchaser, with Orrick, Herrington & Sutcliffe LLP as counsel to Monarch, and Paul Hastings served as counsel to the tax credit purchaser.