Macquarie Capital, Advanced Microgrid Solutions and CIT Close Industry-First Battery Storage Project Financing

March 27, 2017

  • Port­fo­lio will deploy Tes­la Energy’s Pow­er­pack 2 lithi­um-ion bat­tery system
  • Bell­wether deal marks an impor­tant project financ­ing mile­stone for the emerg­ing bat­tery-based ener­gy stor­age sector

Mac­quar­ie Cap­i­tal, the cor­po­rate advi­so­ry, cap­i­tal mar­kets and prin­ci­pal invest­ing arm of Mac­quar­ie Group (“Mac­quar­ie”) (ASX: MQG; ADR: MQBKY), today 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.

Rishi Sharma
Tel: (212) 231‑0494