On.Energy closes $40m financing for 80MWh Texas battery portfolio

December 21, 2023

Miami-headquartered battery energy storage integrator and independent power producer On.Energy has closed $40 million of construction and permanent debt facilities for an 80MWh battery storage portfolio in Texas, with financing provided by Live Oak Bank.

The Palo Verde projects, set to come online in Q3 of 2024, will support the balancing of the ERCOT grid by providing both ancillary services as well as arbitrage.

This financing also integrates an investment tax credit transfer, among the first of its kind for merchant battery storage projects. The portfolio includes both greenfield development sites as well as projects acquired “through M&A” in mid-2023.

“On.Energy has closed a capital solution for our assets at a time when many are still trying to sort out the Inflation Reduction Act and its implications,” said On.Energy CFO David Fernandes. “The structure underpinning the Palo Verde Portfolio establishes On.Energy as a serious player in the ESS space with an emerging financial capability to match our renowned technical credentials.”

Live Oak Bank, a specialised lender providing energy transition capital to battery storage projects across the US, is providing construction debt followed by long-term debt financing under the USDA Business & Industry loan guarantee program. “Live Oak is excited to partner with On.Energy and to support energy projects that bring good jobs, carbon reduction, and electricity savings to Texas,” said Kevin Rooney, loan officer for Live Oak’s energy and infrastructure emerging markets team.