Papago Storage project : Recurrent Energy secures $513m for Arizona’s largest energy storage project

Recurrent Energy, a prominent subsidiary of Canadian Solar Inc. (NASDAQ: CSIQ), announced a significant stride in renewable energy with the procurement of $513 million in project financing for the Papago Storage project. Slated to begin construction in the third quarter of 2024 and expected to commence operations by the second quarter of 2025, this project marks a major milestone in Arizona’s clean energy sector.

The Papago Storage project, set to become the largest energy storage facility in Arizona, has successfully secured financing that includes a $249 million construction and term loan, a $163 million tax equity bridge loan, and a $101 million letter of credit facility. The project’s financing was coordinated by MUFG and Nord/LB, with additional support from Bank of America, CoBank, DNB, Rabobank, Siemens, and Zions acting as joint lead arrangers.

Fred Zelaya, Managing Director of MUFG, expressed enthusiasm about the collaboration: “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.”

Recurrent Energy’s $513 million financing for the Papago Storage project in Arizona marks a significant advancement in the U.S. energy storage sector.

Sondra Martinez, Managing Director of Nord/LB, highlighted the project’s significance: “Nord/LB is pleased to have acted as a coordinating lead arranger 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 the lead in financing strategic battery storage assets, supporting the energy transition and mission to achieve a more reliable, carbon-free grid.”

Once operational, Papago Storage will provide enough power for approximately 244,000 homes for four hours daily, significantly bolstering Arizona’s capacity to utilize renewable energy. The project, located in Maricopa County, spans approximately 2,800 acres and is connected to the Delaney Substation. With a planned capacity of 1,200 MWh, it represents a critical advancement in energy storage technology and infrastructure.

Ismael Guerrero, CEO of Recurrent Energy, commented on the project’s journey and its impact on the region: “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.”

Recurrent Energy continues to lead in solar and energy storage project development, having delivered over 10 GWp of solar power projects and 3.3 GWh of energy storage projects globally. With a development pipeline that includes 26 GWp of solar and 56 GWh of energy storage projects, Recurrent Energy’s impact extends across North America with 6.3 GWp of solar projects and 18.9 GWh of battery energy storage projects currently in development.