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Recurrent Energy secures $513 million in financing for the largest energy storage project in Arizona

Image for representation purposes only. Source: DNV

Recurrent Energy (a subsidiary of Canadian Solar Inc), a leading solar plus energy storage project developer announced that it has secured $513 million in project financing for its Papago Storage Project – the largest energy storage project in Arizona.

Located in the Maricopa region of Arizona, the 1,200 MWh Papago Storage Project is expected to dispatch power for approximately 244,000 homes for four hours daily enabling greater use of renewable energy to power Arizona's economy. MUFG [Mitsubishi UFJ Financial Group] and Nord/LB acted as coordinating lead arrangers for the Papago Storage project financing. The financing includes a $249 million construction and term loan, a $163 million tax equity bridge loan, and a $101 million letter of credit facility. Joint lead arrangers for the transaction included Bank of America, CoBank, DNB, Rabobank, Siemens Financial Services, and Zions.

"Today, 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. We appreciate the continued support from our partners Nord/LB and MUFG in our shared mission to advance the clean energy transition," said Ismael Guerrero, CEO of Recurrent Energy.

The Papago Storage Project is expected to commence commercial operations in the second quarter of 2025 and has secured a 20-year tolling agreement with Arizona Public Service Company. On completion, Recurrent Energy will own and operate the project.

"MUFG is pleased to have supported Recurrent Energy on this important project, which will contribute to the transition to a low-carbon economy," commented Fred Zelaya, Managing Director of MUFG.

Recurrent Energy has delivered more than 10GWp of solar projects and 3.3 GWh of energy storage projects globally. In North America, the company is developing a pipeline of 6.3GWp of solar projects and 18.9 GWh of battery energy storage projects.

"Papago Storage marks Nord/LB's 11th standalone storage project in the U.S., and 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," said Sondra Martinez, Managing Director of Nord/LB. 

"We look forward to continuing to support Recurrent Energy's ambitious growth in the industry."


US utility-scale battery storage to double, led by additions in California, Texas -  

America's battery storage capacity is likely to double in 2024, the US Energy Information Administration (EIA) said. Data shows battery storage capacity in the US would increase by 89 percent if all planned systems come onstream within the targeted time, the EIA said. The country had 16 GW of operational utility-scale battery capacity as of 2023, this could expand to 30 GW by year-end since developers have planned additions of another 15 GW in 2024, the agency said.
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