Macquarie Capital, the corporate advisory, capital markets and principal investing arm of Macquarie Group (“Macquarie”) announced the closing of the first non-recourse project financing of battery-based energy storage systems with CIT Bank.
The financing, led by CIT, backs a 50MW fleet of behind-the-meter, battery storage systems located in certain grid-constrained pockets of the West Los Angeles Basin service territory of Southern California Edison (“SCE”) that Macquarie Capital acquired from Advanced Microgrid Solutions (“AMS”) in August 2016. Since the acquisition, Macquarie and AMS have been jointly developing and constructing the portfolio, which is expected to come online in phases over the next 12-24 months.
”Macquarie Capital is proud to have closed this first-of-its-kind financing for these critical battery storage infrastructure assets in Southern California,” said Michael Silverton, Head of Macquarie Capital for the US and Latin America.
“As an active developer in infrastructure assets globally, Macquarie believes there is tremendous opportunity for this asset class, and looks forward to continuing to grow its presence with leading innovators in the space including AMS, CIT and Tesla,” said Nick Butcher, Global Head of Infrastructure for Macquarie Capital.
“CIT is pleased to achieve this landmark project finance transaction, further demonstrating our commitment to supporting innovation and sustainable solutions in the energy sector,” said Mike Lorusso, group head and managing director of CIT’s Energy Finance business. “Our deep expertise and track record of execution in financing distributed power assets allowed CIT to design a market-leading solution in support of Macquarie Capital, AMS and Tesla. We look forward to further building on our relationship with these pioneers,” said Rhys Marsh, director in CIT’s Energy Finance business.
The fleet of energy storage systems, which will be located at various large-load commercial, industrial and government host sites in Los Angeles and Orange counties, will be used for utility grid services including flexible and reserve capacity, solar integration and voltage management in addition to retail energy services such as demand management, back up generation and enhanced power quality.
AMS, which led the development of the portfolio, will serve as the asset manager of the projects. “Macquarie is financing a revolution in the energy industry,” said Susan Kennedy, CEO of AMS. “The era of energy storage has begun.” SCE, which is California’s second largest utility, will purchase capacity from the Macquarie-owned fleet of behind-the-meter, battery-based energy storage systems under 10-year capacity contracts to provide load reduction services as part of SCE’s plan to modernize the grid by 2022.