The financing arrangement includes a construction facility, an ITC transfer and preferred equity.
Spearmint Energy has secured approximately $450m in project financing to construct the 300MW/600MW-hour Red Egret battery energy storage system (BESS) in Texas City, Texas.
The project, which is expected to commence operations in 2027, is part of the Electric Reliability Council of Texas (ERCOT) power grid.
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The financing arrangement comprises a construction facility, an investment tax credit (ITC) transfer and preferred equity.
The construction financing for Red Egret includes a $225m construction facility provided by a consortium of banks, with First Citizens Bank and Investec serving as coordinating lead arrangers and joint bookrunners.
Nord/LB is acting as joint lead arranger and East West Bank is the mandated lead arranger.
Upon the start of commercial operations, the facility will be repaid using $96m in preferred equity investment from Nuveen Energy Infrastructure Credit, supported by TIAA.
The project will also obtain around $126m from an ITC transfer commitment.
Construction is already under way, with Mortenson Company overseeing the build.
Spearmint founder, president and CEO Andrew Waranch said: “As ageing grid infrastructure meets unprecedented growth in electricity demand, this financing supports Spearmint’s ability to increase energy resilience in ERCOT through battery energy storage systems.
“Through our development of Red Egret, we are working to strengthen reliability and deliver safe, cost-effective power to homes and businesses in Texas City and throughout the Texas Gulf Coast.”
Legal counsel for the transaction included Paul Hastings for Spearmint; Willkie Farr & Gallagher for the lenders; Skadden, Arps, Slate, Meagher & Flom for the tax credit purchaser; and Milbank for the preferred equity investor.
Upon completion, Spearmint’s total battery capacity will exceed 1.5GW-hours across four projects.
The Red Egret project is the fourth time Spearmint will utilise the PowerTitan platform from Sungrow USA.
Last year, in April, Spearmint closed financing of more than $250m for the Tierra Seca and Seven Flags BESS projects in Texas.
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