Recurrent Energy, a subsidiary of Canadian Solar Inc. and a global leader in solar and energy storage development has announced a significant milestone by securing $513 million in project financing for the Papago Storage project. Located in Maricopa County, Arizona, Papago Storage will become the largest energy storage project in the state. This landmark project will hold a 20-year tolling agreement with Arizona Public Service Company.
The 1,200 MWh Papago Storage project is set to commence construction in the third quarter of 2024, with commercial operations expected to begin by the second quarter of 2025. Once operational, Papago Storage will dispatch enough power to serve approximately 244,000 homes for four hours daily. This capability will significantly enhance Arizona’s renewable energy infrastructure, supporting the state’s rapid economic growth and transition to sustainable energy sources. Recurrent Energy will retain ownership and operational responsibilities for Papago Storage, which is anticipated to create 200 jobs during construction.
Ismael Guerrero, CEO of Recurrent Energy, reflected on the project’s journey, “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. 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.”
MUFG and Nord/LB coordinated the financing for Papago Storage and acted as lead arrangers. The comprehensive financing package includes a $249 million construction and term loan, a $163 million tax equity bridge loan, and a $101 million letter of credit facility. Additional joint lead arrangers included Bank of America, CoBank, DNB, Rabobank, Siemens Financial Services, and Zions.
Fred Zelaya, MUFG’s Managing Director, highlighted the significance of this project, stating, “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.”
Sondra Martinez, Managing Director of Nord/LB, echoed this sentiment, noting, “Papago Storage marks Nord/LB’s 11th standalone storage project in the U.S. 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.”
