Cypress Creek has successfully closed $3.5 billion in debt and tax equity financing to fund the first two phases of its massive Steel River Solar and Storage Energy Center project in Arkansas. Once fully realized, the three-stage buildout will stand as one of the largest co-located solar and battery storage installations in the United States. Additionally, the company recently acquired the Steel River project from Swift Current Energy.
The initial $3.5 billion capital injection will directly fund the construction and long-term operation of phases 1 and 2, which are slated to bring 1.63 gigawatts (GW) of solar generation capacity alongside 1.9 gigawatt-hours (GWh) of battery energy storage online. Cypress Creek also aims to complete the third and final phase by 2029, pushing the project’s total footprint to an immense 2.45 GW of solar and 2.9 GWh of storage.
Steel River Solar and Storage Project in Arkansas: Project Overview
Steel River is being developed in northeastern Arkansas within Mississippi County and is designed as a three-phase solar and battery storage project. Upon completion, the project will comprise approximately 2.45GW of solar capacity and 720MW/2.9GWh of battery storage. Each phase will include about 815MW of solar generation combined with 240MW/960MWh of battery storage. All three phases are currently expected to enter service by 2029.
The solar-storage hybrid project was originally developed by Swift Current Energy before being sold to Cypress Creek, which will now oversee development, financing, construction, ownership and long-term operation.
Wall Street Backs Mid-South Renewables
The $3.5 billion financing package highlights increasing corporate appetite for utility-scale infrastructure. This is particular to when projects pair renewable generation with large-scale battery systems to stabilize regional grids.
A syndicate of global financial majors underwrote the transaction. Barclays, BNP Paribas, Santander, and Wells Fargo acted as the initial coordinating lead arrangers and joint bookrunners. Additional roles included:
- Barclays and Wells Fargo: Green Loan Agents
- BNP Paribas and Wells Fargo: Hedge Coordinators
- Santander: Administrative Agent
- Barclays and Santander: Financial and M&A Advisors
Concurrently, Cypress Creek locked down tax equity financing from an undisclosed major investor. The renewable energy developer also finalized a long-term virtual power purchase agreement (VPPA) with an investment-grade corporate buyer to secure predictable revenue streams. Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Cypress Creek.
“This financing reflects both the scale of the project and the strong support we’re seeing from the capital markets for high-quality energy infrastructure projects,” said Kevin Smith, CEO of Cypress Creek Energy. Smith also noted that the capacity will help satisfy “rapidly growing electricity demand while delivering long-term economic benefits.”
Domestically Sourced Supply Chains
A notable feature of the Steel River Solar and Storage project in Arkansas is its heavy reliance on domestic supply chains. This supply chain model is designed by incentivized federal tax credits under the Inflation Reduction Act.
Steel River Solar and Storage project will also use 100% U.S.-made steel foundations. Almost all of it will be sourced locally from manufacturing facilities in Mississippi County, Arkansas.
Furthermore, the project’s solar arrays will rely entirely on American-manufactured thin-film solar modules from Ohio-based First Solar. Other primary components will be contracted to Arkansas-based suppliers.
Additionally, the project’s economic impact on the region is projected to be substantial. Lifetime tax revenue of about $300 million will be available to fund local schools, roads and public safety. On-site construction labor is also expected to peak at 700 jobs.
Grid Reliability Drive
By pairing massive solar arrays with lithium-ion battery banks, Cypress Creek is targeting reliable-capacity demands of regional grid operators. The 1.9 GWh storage component of the initial phases will capture excess solar generation during peak midday hours and discharge it back into the grid during high-demand evening intervals. This will help mitigate price volatility and reduce regional brownout risks. This also comes as data center construction increasingly influence the development of renewable energy projects. Some of these include the 600-MW solar facility expected to power Google’s $4bn Project Pyramid data center in the city of West Memphis.
With more than 19 GW of projects commercialized since its inception, Cypress Creek already manages an 8.6 GW operations and maintenance portfolio across 24 states. The Steel River project significantly increases the developer’s 19 GW forward-looking development pipeline. It also positions Arkansas at a favorable position in the race for American clean energy infrastructure.
Arkansas Steel River Solar and Storage Project Fact Sheet
Location: Mississippi County
Developer/Owner: Cypress Creek Renewables
Original Developer: Swift Current Energy
Project Type: Utility-scale solar PV and battery energy storage
Solar Capacity: 2.45GW DC (1.5GW AC)
Battery Storage Capacity: 720MW / 2.9GWh
Estimated Capital Cost: More than US$4.5 billion
Financing Secured: US$3.5 billion
Construction Phases: 3
Expected Commercial Operation: By 2029
Status: Development and financing stage
Leave a Reply