Plus Power secures $1.8bn in US storage financing

October 18, 2023

Plus Power LLC has secured $1.8 billion in new financing for standalone battery storage projects in the US states of Arizona and Texas.

The financing covers five projects totaling 1,040MW of capacity, or 2,760MWh. The transactions will support both the construction and operation of the portfolio and include construction financing, term financing, letters of credit, and tax equity investments, in partnership with 11 industry lenders and investors.

Two of the projects are located in Arizona, they are:

  • The 250MW / 1,000MWh Sierra Estrella Energy Storage facility in Avondale, Arizona, west of Phoenix, which secured $202 million of tax equity from Bank of America, coupled with a $505 million construction, term loan, and letter of credit facility
  • The 90 MW / 360 MWh Superstition Energy Storage project in Gilbert, southeast of Phoenix, which secured a $196 million construction, term loan and letter of credit facility.

Both of the projects have 20-year energy storage services agreements with Salt River Project and are under construction, aiming to be online by the second quarter of 2024. Norddeutsche Landesbank and Société Générale acted as coordinating lead arrangers while Mizuho, U.S. Bank, Bank of America, CoBank, and Siemens Financial Services, Inc. were joint lead arrangers. 

There were also construction, term, and tax equity financings totaling $884 million for three new standalone storage facilities in Texas. Deutsche Bank and First Citizens Bank were the coordinating lead arrangers, with First Citizens Bank as the administrative agent and Siemens Financial Services, Inc. acting as the joint lead arranger. The three financings break down as follows:

  • $212.2 million of tax equity financing from Foss & Company, as well as $276 million of construction and term financing, for the 300 MW / 600 MWh Rodeo Ranch Energy Storage facility in Pecos
  • $196 million of construction and term financing for the 200 MW / 400 MWh Ebony Energy Storage facility in Comal County, northeast of San Antonio
  • $200 million of construction and term financing for the 200 MW / 400 MWh Anemoi Energy Storage facility in Hidalgo County, on the Mexican border northwest of Matamoros.

“While the Ebony and Anemoi projects are expected to operate as merchant resources in the ERCOT wholesale market, Plus Power executed an innovative hedge for Goldman Sachs’ commodities group for a portion of the Rodeo Ranch Energy Storage facility,” a Plus Power statement said.

Josh Goldstein, chief financial officer of Plus Power, said: “Over the last year, Plus Power has raised an unparalleled amount of capital for standalone storage projects from a wide range of leading energy project finance banks and investors. This capital will support the ongoing buildout of the largest and most diverse portfolio of standalone storage projects in the US. The scale highlights our first-mover advantage in bringing high-quality projects to market as well as the tremendous work by our fantastic team.”

Omer Farooq, head of sustainable asset finance in the global sustainable finance group at Bank of America, commented: “As part of Bank of America’s $1.5 trillion sustainable finance commitment by 2030, we are scaling capital deployment for innovative decarboniation technologies like grid storage. We’re proud to be supporting Plus Power on this breakthrough transaction by delivering financing solutions that this industry needs to continue growing.”

Jeremy Eisman, managing director and head of infrastructure & energy financing at Deutsche Bank, added: “Plus Power is a market leader in the battery energy storage sector and we are honoured to have collaborated with them on these breakthrough financings. We acknowledge the important role that battery storage plays in ensuring a clean and reliable electric grid and look forward to continuing to support the Plus Power team’s continued growth in this sector.”

Mike Lorusso, managing director of First Citizen’s Bank’s energy group, said: “As a leader in battery energy storage financing, First Citizens Bank was pleased to support Plus Power in arranging financing for these three significant projects,. Energy storage continues to prove its value as a source of grid stability and flexibility as renewable power takes an ever-greater role in meeting the nation’s energy needs. Plus Power is a leading developer in this field and we look forward to working closely with them on future projects.”