Imperial Solar Energy Center South (ISEC-South), a 130 megawatt photovoltaic project owned by Tenaska recently closed a $500 million round of debt financing. The project, which began construction last year is using First Solar modules. Tenaska has developed more than nine gigawatts of electric generation, including natural gas, coal and biomass projects, but this is its first solar project.
Power from the project will be sold to San Diego Gas & Electric (SDG&E) under a 25-year power-purchase agreement. The financing was led by the Bank of Tokyo-Mitsubishi UFJ, and Union Bank, N.A. But in all, nine banks participated in the debt financing, including BBVA Compass, DZ Bank, Helaba, Key Bank, Lloyds TSB Bank, Royal Bank of Canada and Santander's Sovereign Bank, Tenaska said.
Since construction on the project started in 2011 it will qualify for the 1603 Treasury Tax Grant, according to Tenaska CFO Greg Van Dyke.
While project financing has become more difficult of late, with debt crises in Europe and the loss of other incentives, Tenaska’s relationships with lenders helped it gain financing. “The financing benefited from Tenaska’s long standing relationships and successful financings with many of the banks. The strength of key project participants, First Solar and SDG&E, were also important to a successful financing,” Van Dyke said.
Tenaska could have started its venture into solar with a smaller project, but didn’t. “The size of the ISEC-South project is consistent with the wishes of our customer, SDG&E and allowed us to achieve economies of scale which resulted in a lower power sales price,” Van Dyke said.
It could have gone with solar thermal projects, which use some of the same elements, like steam turbines, that natural gas plants or coal plants do, but didn’t. “First Solar thin-film technology was the best fit for our customer and this project,” Van Dyke said. “We continue to evaluate a variety of technologies related to other projects in various stages of development.”
Indeed, it’s already looking to a different solar technology to power Imperial’s sister solar plant, Imperial Energy Center West, a 150 megawatt project slated to use Soitec’s Concentrix high-concentrating photovoltaic modules, making it one of the largest plants using CPV technology ever built. Construction on that project could start as early as 2012.