Quinbrook is setting its sights on further combined solar and storage deals after the Australian asset manager concluded $1.9 billion in financing for Gemini. The 690MW solar and 380MW storage project, in Nevada, became the largest tax equity financing for a single renewables project in the US when it closed last week.
The financing, according to a statement from Quinbrook, consists of $1.3 billion in credit facilities, including a construction/term loan, tax equity bridge loan and letter of credit facility.
The financing includes $532 million in tax equity commitments provided by Truist Bank and Bank of America. The construction facilities were led by four coordinating lead arrangers – KeyBanc Capital Markets, MUFG Bank, Bank of America and Norddeutsche Landesbank Girozentrale – who syndicated the credit facilities to 19 lenders, while Quinbrook and Primergy arranged the $95 million mezzanine debt facility from Voya Investment Management. Quinbrook itself has also committed capital from its Low Carbon Power fund, which closed on $1.6 billion in early 2019.
“The tax equity is a fairly conventional structure and pricing,” Quinbrook co-founder David Scaysbrook told Infrastructure Investor. “We can’t reveal the pricing, but it’s a fairly conventional tax equity structure for solar projects that have battery storage attached to them. The entire project qualifies for the investment tax credit.”
A heliocentric model
The Gemini project is a vote of confidence on behalf of the firm for solar and storage projects. It is increasingly focused on addressing decarbonisation and intermittent power, with Quinbrook awarded last month in the UK four new synchronous condenser projects to address grid stability issues and enable more intermittent renewable sites to be connected.
“We are calling solar and storage the engine room of the energy transition”, Scaysbrook stated. “Wind tends to be very locationally specific. Hydro is very locationally specific, so that’s why we have decided to focus very much on solar and storage as part of Quinbrook strategies going forward. We invest in and operate hydro, biomass and wind, but we’re going to anchor it with solar and storage, and then we’re going to target different industry sectors that need to be decarbonised.”
Quinbrook is now working on a similar project in the UK after it acquired Project Fortress in September, a 350MW solar-plus-storage site. Once operational, Fortress is set to be the largest single-site solar installation in the UK.
When Quinbrook’s initial investment was made, it was estimated that the Gemini facility would be up and running by 2023 and Scaysbrook is confident that it will remain on schedule, despite recent troubles for the US solar market. “It’s a bit of bright news in an otherwise fairly gloomy news environment at the moment for the solar sector. We’re fortunate that we locked in a lot of our equipment prior to the more recent supply chain and inflation issues and module availability that we’re seeing in the market. Barring completely unforeseen events, we will be on schedule to complete and commission the project by the end of 2023. We’ve got a fair amount of leeway in the project schedule, so we’re actually targeting to be complete well ahead of the end of 2023.”
Once up and running, the storage element is expected to be sized at 1,416MWh, or four hours-worth of battery capacity.
“We essentially oversized the solar project so that during the day we have surplus solar capacity to fully charge the battery so that in the evening when the sun sets and the Las Vegas Strip lights up, we have four hours of fully charged solar power within the batteries to discharge into that early evening power demand in Nevada”, Scaysbrook explained.
Initially, Arevia Power – a solar developer based in California – was a partner on the project and, according to Scaysbrook, involved in much of the early development work on the Gemini site. However, all of the development work has since been transferred in-house to Primergy Solar after its establishment by Quinbrook in 2020. Primergy has since finished the design of the site, as well as worked on procurement, construction contractors and the aforementioned $1.9 billion in outside financing.