AES Corporation has reached financial close on the $2.3 billion Southland repowering project in southern California.
Headquartered in Virginia, the company received $2 billion in non-recourse financing for the scheme, which includes 1,284MW of combined cycle natural gas generation and 100MW of battery-based energy storage in Huntington Beach and Alamitos.
The project will replace three existing facilities – in Alamitos, Redondo Beach and Huntington Beach – totalling 3,941MW in capacity, set to retire by the end of 2020.
AES chief executive Andrés Gluski called the project “a key component of our strategic objective of increasing our US dollar-based, long-term contracted position”, adding that it “will provide Californians with clean and reliable energy”.
The financing comprises nearly $1.5 billion in senior secured notes amortising through 2040 and a $492 million senior secured term loan amortising through 2027. Lenders included 19 banks and 52 note purchasers, with Norton Rose Fulbright advising on the transaction. AES is chipping in $350 million in equity.
In 2014, the company was awarded 20-year power purchase agreements for the project by Southern California Edison, to which it will sell 100 percent of its capacity.
Already underway at the Huntington Beach site, construction is set to begin this month at Alamitos. Commercial operations are expected to start on gas generation in 2020 and on energy storage the following year.