Intersect Power, a clean energy developer, and operator announced this Thursday it closed eight separate transactions for a total of $2,6 billion in financing commitments that the company will inject into the construction and operations of a six solar project portfolio.
Firstly, the transactions will cover construction financing, tax equity, and land financing of the portfolio. It is a 2,2 gigawatts of late-stage solar projects portfolio; with 1.4 GWh of storage that will be in operation by 2023.
Moreover, the projects locate across Texas and California. Those are Athos III (CA), Radian (TX), Oberon I (CA), Oberon II (CA), Lumina I (TX) and Lumina II (TX).
In addition, according to the statement, what distinguishes these financings from typical renewable projects is the $1.4B of portfolio level; term debt funding provided by HPS Investment Partners and co-Investors CarVal Investors, Generate and Climate Adaptive.
Indeed, the company has a differentiated approach to power marketing and financing. It focuses on the active management of shorter-tenor offtake contracts and portfolio-level financing rather than long-term contracts. This structure allows delivering superior risk-adjusted returns for investors.
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Intersect Power to have two of the six projects operational by 2022
About the matter, Sheldon Kimber, founder, and CEO of Intersect, said. “These closings demonstrate what Intersect has been saying for some time now. That today’s long-term offtake contracts destroy value, and that there are innovative ways to finance clean energy assets which enable more valuable offtake structures.”
He also remarked. “This financing will allow Intersect to deliver a core set of projects in the next two years that will serve as the platform for future growth into green hydrogen and beyond. This is the base from which our company will build the most scalable, transformative clean energy projects that minimize cost and risk per MW deployed.”
On the other hand, Michael Patterson, Governing Partner of HPS, said. “The innovative financial solutions that Intersect will be able to implement thanks to this landmark transaction will play a key role in solidifying its position at the forefront of the industry, and we look forward to continuing to support the Company as it builds on its strong track record of success.”
Finally, the company will use $800 million of construction financing proceeds to build up the Athos III project and the Radian project; with 310MW/453MW, and 415MW, respectively. These projects are under construction and will begin operations in late 2022.