Earthrise Energy, an independent power producer, has officially raised a sum of $630 million, which happens to be a first-of-its-kind tax equity and debt financing, meant to support the company’s 270 MWac solar project, Gibson City Solar, within Illinois’ MISO power market.
According to certain reports, the debt financing in question is understood to be include construction-to-term loan, a tax equity bridge loan, and a letter of credit facility. More on the same would reveal how BBVA, Intesa Sanpaolo, and Nord/LB served as Coordinating Lead Arrangers and Bookrunners for the debt financing, whereas on the other hand, a Fortune 500 telecommunications company provided the tax equity commitment.
“Securing this financing for Gibson City Solar marks a significant milestone for Earthrise, and we are proud to have structured the first solar project finance transactions utilizing surplus interconnection service in MISO. This structure presented attributes that required innovative structuring, and together with the coordinating lead arrangers and tax equity investor we developed solutions which we believe will serve as a blueprint for similar projects going forward,” said Kenton Harder, VP Capital Markets at Earthrise Energy.
Markedly enough, the stated transaction stands on a distinct position due to its shared point of interconnection between the solar project and Earthrise’s existing thermal power plant, using surplus interconnection service. On top of that, the transaction is also one of the first solar project financings to utilize the Illinois Power Agency’s Indexed Renewable Energy Credit offtake contract.
Anyway, the development in question delivers a rather interesting follow-up to Earthrise’s wider drive of acquiring portfolios of natural gas peaking power plants. To go along with this, the company is also developing adjacent solar capacity across all sites. These projects, on their part, will leverage the existing interconnection rights held by the peaking plants to deliver clean, cost-effective power to the grid with unparalleled speed to market.
All in all, Earthrise’s current project pipeline is understood to boast more than 1.4 GWs of new clean energy capacity which, on its part, is expected to be brought online by the end of 2028, with future project financings likely to adopt a similar structure.
“It has been a pleasure to collaborate with Earthrise in support of this important set of financings. As the industry aims to build a more sustainable future while serving increasing power demand, it is essential to embrace a comprehensive approach that leverages existing infrastructure to advance clean energy expansion. We look forward to Earthrise’s continued leadership and impact across the clean energy markets,” said Ari Pribadi, Global Co-Head of Investment Banking at Marathon Capital.
Among other things, we ought to mention how Marathon Capital acted as exclusive financial advisor to Earthrise on the overall transaction. Cornerstone Financial Advisors acted as exclusive financial advisor to the tax equity investor. Latham & Watkins LLP acted as principal counsel to Earthrise. Milbank LLP served as principal counsel to the lenders, with Akin Gump Strauss Hauer & Feld LLP as principal legal counsel to the tax equity investor.
Founded in 2019, Earthrise’s has made a name for itself on the back of a mission to reduce power sector greenhouse gas emissions. The company is presently focused on acquiring, owning, and operating legacy fossil fuel assets, while simultaneously repurposing the transmission infrastructure for renewable energy development projects, bringing them online faster than those typical greenfield renewable energy projects.
Earthrise’s progress in its mission can also be understood once you consider, alongside 1.4 GWs of new clean energy capacity, it has more than 1.7 GW of gas-fired generation capacity and has a solar development pipeline of more than 1.7 GW.
“At Earthrise, we are committed to advancing a future where clean energy is reliable and resilient. This transaction marks a pivotal achievement in delivering utility-scale solar solutions to the grid backed by a differentiated project development strategy, robust financial innovation, and operational discipline,” said Jeff Hunter, CFO of Earthrise Energy.
