Recurrent Energy, a subsidiary of Canadian Solar Inc. and a global developer, owner, and operator of solar and energy storage assets, announced it has secured $513 million in project financing for its landmark Papago Storage project located in Maricopa County, Arizona.
Construction of the 1,200 MWh Papago Storage is slated to commence in the third quarter of 2024, with commercial operations expected to begin in the second quarter of 2025. The project holds a 20-year tolling agreement with Arizona Public Service Company and is expected to create 200 jobs during construction.
Following construction, Recurrent Energy will own and operate Papago Storage. The project will dispatch enough power for approximately 244,000 homes for four hours daily, enabling renewable energy to further power Arizona’s growing economy.
MUFG and Nord/LB acted as coordinating lead arrangers for the Papago Storage project financing. The financing includes a $249 million construction and term loan, a $163 million tax equity bridge loan, and a $101 million letter of credit facility. Joint lead arrangers for the transaction included Bank of America, CoBank, DNB, Rabobank, Siemens Financial Services, and Zions.
Fred Zelaya, Managing Director of MUFG, commented, “MUFG is pleased to have supported Recurrent Energy on this important project, which will contribute to the transition to a low-carbon economy. This transaction showcases MUFG’s expertise and leadership in financing renewable energy and energy storage projects across the U.S. and globally. We look forward to collaborating with Recurrent Energy on future developments.”
Sondra Martinez, Managing Director of Nord/LB, said, “Nord/LB is pleased to have acted as a coordinating lead arranger (CLA) for the successful closing of Recurrent Energy’s latest landmark project. Papago Storage marks Nord/LB’s 11th standalone storage project in the U.S., and we are excited to take lead in financing strategic battery storage assets, supporting the energy transition and mission to achieve a more reliable, carbon-free grid. We look forward to continuing to support Recurrent Energy’s ambitious growth in the industry.”
Ismael Guerrero, CEO of Recurrent Energy, added, “When we began developing Papago Storage in 2016, the Arizona storage market was in its infancy. Today, Arizona is one of the fastest-growing markets for energy storage in the United States, bolstered by the state’s expanding economy and cost-effective renewable energy resources. Today, we are thrilled to see nearly a decade of planning culminate in the financing of what will be the largest energy storage project in Arizona. We appreciate the continued support from our partners Nord/LB and MUFG in our shared mission to advance the clean energy transition.”
To date, Recurrent Energy has delivered more than 10 GWp of solar power projects and 3.3 GWh of energy storage projects, with a global project development pipeline of 26 GWp and 56 GWh for solar and energy storage respectively. In North America, Recurrent Energy is actively developing a pipeline of 6.3 GWp of solar projects and 18.9 GWh of battery energy storage projects.
