Over half a billion dollars raised for Primergy’s Ash Creek solar project, Texas

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A US$588 million construction loan has been provided to finance the 408MW Ash Creek Solar project in Hill County, Texas. Led by Primergy Solar LLC, the solar project was acquired in 2021 from Orion Power Generation on a 3,480-acre site. It is expected to produce enough clean, renewable, carbon-free energy to power nearly 90,000 homes. The project, which is among the largest in the state, will also involve the construction of a 300MW battery energy storage system that will provide consistent dispatchable energy. This section of the project is expected to take an average of 15 months to be completed.

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The new debt financing includes a construction loan, tax credit transfer bridge loan, and related letters of credit. MUFG Bank lead the deal with SMBC as lead structuring arrangers, and a syndicate of coordinating lead arrangers (“CLAs”). They include BNP Paribas, Commerzbank AG, Crédit Agricole Corporate and Investment Bank, and ING Capital. Additionally, KeyBanc Capital Markets, Norddeutsche Landesbank Girozentrale, New York Branch, and Rabobank. The company also signed a long-term power purchase agreement with Microsoft for the full capacity of the plant.

The Ash Creek Solar project team

Primergy has engaged SOLV Energy, a leading utility-scale solar contractor, as the engineering, procurement, and construction partner. Construction has started and is expected to create approximately 350 local full-time construction jobs. Once operational, the safety and reliability of Ash Creek Solar will be managed by six full-time and permanent positions on-site. The plant is strategically situated near several existing fossil fuel plants and high energy demand.

Construction timeline

Construction began last year and is expected to be completed by mid-2025. The company is also working closely with local leaders, school districts, and over 20 landowners to ensure Ash Creek Solar brings tangible benefits to the community beyond the construction phase. Over Ash Creek Solar’s operating life, it will provide an estimated $100 million in tax payments to Hill County. Furthermore, it will substantially increase the tax base of local school districts.

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“The successful completion of this financing and a long-term PPA from Microsoft for Ash Creek is a testament to Primergy’s proven ability to creatively develop, finance, build, and operate large-scale renewables projects. Ash Creek aligns with Primergy’s mission to invest in well-located projects that offer regional diversity to our portfolio and serve the needs of leading corporate customers. Our team is extremely grateful for our continued partnership with prominent clean energy project financiers to make this a reality and are proud to work with Microsoft on meeting its sustainability commitments,” said Ty Daul, CEO of Primergy.

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Solar in Texas

Texas is currently ranked No 1 among the states in the US for the most solar installed, at 22,872 MW, according to the Solar Energy Industries Association (SEIA). It was reported last week that “from 2024-2034, Texas will lead the nation with nearly 100 GW of new solar capacity additions, outpacing the next closest state by a 2 to 1 margin.” The state’s enormous demand for electricity has been claimed to be the reason for this.