DEAL: First commercial energy storage system project

Author: John Crabb | Published: 12 Apr 2017

Macquarie Capital has closed the project financing for a 50MW lithium-ion battery system in California, the first commercial project financing to close in the battery storage sector. The deal is also the first large-scale commercial transaction in this space, and could serve as a starting point for further investment.

Lead arranger and lender CIT Bank provided traditional non-recourse project financing for the project, establishing a simple covenant package, with straightforward debt-to-capital ratios. According to Timothy Moran, partner and US chair of DLA Piper’s renewable energy practice, who acted for CIT Bank, it is the straightforward structure of the deal that makes it a landmark.

"In terms of everything coming together for financeability, it really represents the technology coming into the goldilocks zone," he said.

The Tesla Powerpack battery system used in this deal integrates 'batteries, power electronics, thermal management and controls into a turnkey solution’. The company recently claimed...