Macquarie Capital, Advanced Microgrid Solutions and CIT Close Industry-​​First Battery Storage Project Financing

March 27, 2017

  • Port­fo­lio will deploy Tesla Energy’s Pow­er­pack 2 lithium-​​ion bat­tery system
  • Bell­wether deal marks an impor­tant project financ­ing mile­stone for the emerg­ing battery-​​based energy stor­age sector

Mac­quarie Cap­i­tal, the cor­po­rate advi­sory, cap­i­tal mar­kets and prin­ci­pal invest­ing arm of Mac­quarie Group (“Mac­quarie”) (ASX: MQG; ADR: MQBKY), today announced the clos­ing of the first non-​​recourse project financ­ing of battery-​​based energy stor­age sys­tems with CIT Bank.

The financ­ing, led by CIT, backs a 50MW fleet of behind-​​the-​​meter, bat­tery stor­age sys­tems located in cer­tain grid-​​constrained pock­ets of the West Los Ange­les Basin ser­vice ter­ri­tory of South­ern Cal­i­for­nia Edi­son (“SCE”) that Mac­quarie Cap­i­tal acquired from Advanced Micro­grid Solu­tions (“AMS”) in August 2016.
Since the acqui­si­tion, Mac­quarie and AMS have been jointly devel­op­ing and con­struct­ing the port­fo­lio, which is expected to come online in phases over the next 12–24 months.

Mac­quarie Cap­i­tal is proud to have closed this first-​​of-​​its-​​kind financ­ing for these crit­i­cal bat­tery stor­age infra­struc­ture assets in South­ern Cal­i­for­nia,” said Michael Sil­ver­ton, Head of Mac­quarie Cap­i­tal for the US and Latin America.

As an active devel­oper in infra­struc­ture assets glob­ally, Mac­quarie believes there is tremen­dous oppor­tu­nity for this asset class, and looks for­ward to con­tin­u­ing to grow its pres­ence with lead­ing inno­va­tors in the space includ­ing AMS, CIT and Tesla,” said Nick Butcher, Global Head of Infra­struc­ture for Mac­quarie Capital.

CIT is pleased to achieve this land­mark project finance trans­ac­tion, fur­ther demon­strat­ing our com­mit­ment to sup­port­ing inno­va­tion and sus­tain­able solu­tions in the energy sec­tor,” said Mike Lorusso, group head and man­ag­ing direc­tor of CIT’s Energy Finance busi­ness. “Our deep exper­tise and track record of exe­cu­tion in financ­ing dis­trib­uted power assets allowed CIT to design a market-​​leading solu­tion in sup­port of Mac­quarie Cap­i­tal, AMS and Tesla. We look for­ward to fur­ther build­ing on our rela­tion­ship with these pio­neers,” said Rhys Marsh, direc­tor in CIT’s Energy Finance business.

The fleet of energy stor­age sys­tems, which will be located at var­i­ous large-​​load commercial,industrial and gov­ern­ment host sites in Los Ange­les and Orange coun­ties, will be used for util­ity grid ser­vices includ­ing flex­i­ble and reserve capac­ity, solar inte­gra­tion and volt­age man­age­ment in addi­tion to retail energy ser­vices such as demand man­age­ment, back up gen­er­a­tion and enhanced power quality.

AMS, which led the devel­op­ment of the port­fo­lio, will serve as the asset man­ager of the projects.

Mac­quarie is financ­ing a rev­o­lu­tion in the energy indus­try,” said Susan Kennedy, CEO of AMS.

The era of energy stor­age has begun.” SCE, which is California’s sec­ond largest util­ity, will pur­chase capac­ity from the Macquarie-​​owned fleet of behind-​​the-​​meter, battery-​​based energy stor­age sys­tems under 10-​​year capac­ity con­tracts to pro­vide load reduc­tion ser­vices as part of SCE’s plan to mod­ern­ize the grid by 2022.

Rishi Sharma
Tel: (212) 231‑0494