Recurrent Energy, a subsidiary of Canadian Solar and a global developer, owner, and operator of solar and energy storage assets, has announced $513 million in financing for its Papago Storage project in Maricopa County, Arizona.

Construction of the 1,200 MWh Papago Storage project is slated to commence in the third quarter of 2024, with commercial operations expected to begin in the second quarter of 2025. The project holds a 20-year tolling agreement with Arizona Public Service Company and is expected to create 200 jobs during construction. Following construction, Recurrent Energy will own and operate Papago Storage.

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

“MUFG is pleased to have supported Recurrent Energy on this important project, which will contribute to the transition to a low-carbon economy,” Fred Zelaya, managing director of MUFG said. “This transaction showcases MUFG’s expertise and leadership in financing renewable energy and energy storage projects across the U.S. and globally. We look forward to collaborating with Recurrent Energy on future developments.”

“When we began developing Papago Storage in 2016, the Arizona storage market was in its infancy,” said Ismael Guerrero, CEO of Recurrent Energy. “Today, Arizona is one of the fastest-growing markets for energy storage in the United States, bolstered by the state’s expanding economy and cost-effective renewable energy resources. Today, we are thrilled to see nearly a decade of planning culminate in the financing of what will be the largest energy storage project in Arizona. We appreciate the continued support from our partners Nord/LB and MUFG in our shared mission to advance the clean energy transition.”

In North America, Recurrent Energy is actively developing a pipeline of 6.3 GWp of solar projects and 18.9 GWh of battery energy storage projects.

Earlier in June, Recurrent Energy announced the initial closing and funding of an investment from BlackRock totaling $500 million via a fund managed by its climate infrastructure business. First announced in January of 2024, the sale was contingent on requisite regulatory approvals and other conditions, which have now been met.

The initial closing represents the majority of the planned capital infusion, says Recurrent. Once the transaction is complete, BlackRock’s $500 million investment will represent 20% of the outstanding fully diluted shares of Recurrent Energy on an as-converted basis. Canadian Solar will continue to own the remaining majority shares of Recurrent Energy.