Lydian Energy Secures $689 Million Financing for Solar and Battery Storage Projects
Lydian Energy has achieved a significant milestone in clean energy development by securing a robust financing package of $689 million. This funding supports the establishment of two large-scale solar projects alongside a substantial battery storage facility, strategically located across New Mexico, Texas, and Utah. As electricity demand increases in these regions, this investment aims to strengthen grid resilience and provide dispatchable clean power.
Impactful Financial Backing
The financing package, which includes a Construction-to-Term Loan, Tax Credit Bridge Loan, Co-Investment Bridge Loan, and Letter of Credit Facility, has garnered support from reputable financial institutions MUFG and CIBC. This backing not only highlights their confidence in renewable assets secured by long-term contracts but also underscores the growing importance of tax credit structures in the renewable investment sector.
A Template for Future Funding
This venture marks Lydian Energy’s first complete financing structure, serving as a template for future projects. With the backing of industry leaders, the transaction sets a precedent for institutional lenders, who are increasingly keen on investing in contracted renewable infrastructure. Emre Ersenkal, Lydian Energy’s CEO, highlighted the strategic importance of this financing, asserting it unlocks essential capital for future projects and fosters continued growth within their pipeline.
Solar Assets Anchored by Long-Term Contracts
The AC Ranch 1 solar project in New Mexico boasts a capacity of 75 MWac / 100 MWdc and operates under a busbar power purchase agreement with an investment-grade offtaker. This ensures a predictable generation capacity, contributing to stable quarterly cash flows. Meanwhile, the Yellow Viking project in Texas aims to add 170 MWac / 210 MWdc photovoltaic capacity within ERCOT’s rapidly expanding Oncor territory. Notably, a portion of this output is similarly secured under a long-term contract, effectively reducing merchant exposure while retaining potential upside financial gains.
Enhancing Grid Reliability Through Battery Storage
The Faraday BESS project in Utah is another highlight, featuring a 150 MW / 733 MWh battery energy storage system. Designed to bolster grid stability and manage peak demands effectively, this facility is backed by a long-term agreement with an investment-grade buyer. Battery storage is proving essential for modernizing the grid, especially in Western states increasingly impacted by extreme weather conditions and renewable penetration.
Commitment to Sustainable Energy
Chris Moakley, Co-Founder and Managing Partner at Excelsior Energy Capital, expressed pride in supporting these projects, emphasizing the importance of their role in delivering reliable, sustainable, and affordable domestic energy. The enthusiasm from investors like MUFG and CIBC reflects a growing commitment to supporting necessary solar and storage initiatives.
Policy Alignment and Investor Insights
These projects align well with U.S. decarbonization targets while complying with state reliability mandates and resilience priorities. Federal tax incentives under the Inflation Reduction Act enhance project bankability and create a favorable economic environment for renewable investment. For investors and lenders, this financing showcases a sustained appetite for renewable assets backed by creditworthy offtakers, signifying a shift towards diversified revenue structures.
A Vision for the Future: Scaling a 4.4 GW Development Pipeline
With a growing portfolio that includes 18 solar and storage projects totaling 4.4 GW, Lydian Energy is poised to continue collaborating with financial institutions, regulators, and local communities. As U.S. power demands rise—driven by electrification, industrial expansion, and the growth of data centers—projects that integrate solar generation with battery storage are likely to have pivotal roles in stabilizing grids and accelerating emissions reductions.
In the fast-evolving landscape of renewable energy, this financing package not only symbolizes Lydian Energy’s ambitions but also reflects a broader trend in utility-scale clean energy investments, reinforcing the importance of structured finance and long-term contracts in building resilient power infrastructure.