Recurrent Energy Closes $513M Financing for 1,200 MWh Energy Storage Project in Arizona

Construction of the 1,200 MWh Papago Storage facility is scheduled to begin in the third quarter of 2024, with commercial operations expected to begin in the second quarter of 2025. The project has a 20-year tolling agreement with Arizona Public Service Company and is expected to create 200 sites construction work.

Upon completion of construction, Recurrent Energy will own and operate Papago Storage. The project will deliver enough energy to power approximately 244,000 homes for four hours a day, enabling the use of renewable energy to continue powering Arizona’s growing economy.

MUFG and Nord/LB acted as coordinators and main arrangers of financing for the Papago Storage project. The financing includes a $249 million construction and term loan, a $163 million tax bridge loan and a $101 million letter of credit. Lead arrangers of the transaction included Bank of America, CoBank, DNB, Rabobank, Siemens Financial Services and Zions.

Fred Zelaya, Managing Director of MUFG, commented: “MUFG is pleased to support Recurrent Energy on this important project that will contribute to the transition to a low carbon economy.”

Sondra Martinez, managing director of Nord/LB, said: “Papago Storage is Nord/LB’s eleventh standalone storage project in the U.S., and we are excited to take a leading role in financing strategic battery storage assets, supporting the energy transition and mission to achieve a more reliable, emission-free network. We look forward to continuing to support Recurrent Energy’s ambitious growth in the industry.”

Ismael Guerrero, CEO of Recurrent Energy, added: “When we started developing Papago Storage in 2016, the storage market in Arizona was in its infancy. Arizona is currently one of the fastest-growing energy storage markets in the United States, helped by the state’s growing economy and cost-effective renewable energy resources. Today, we are thrilled that nearly a decade of planning is culminating in funding for Arizona’s largest energy storage project. We appreciate the continued support from our partners Nord/LB and MUFG in our shared mission to accelerate the clean energy transition.