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US ‘distributed front-of-the-meter’ battery storage developers Agilitas, On.Energy raise debt financing from LOIM, Nomura


Developers Agilitas Energy and On.Energy have raised a total US$125 million in debt financing towards solar, energy storage and hybrid solar-plus-storage projects in the US.

Both companies develop projects to retain ownership, with Agilitas Energy focused on distributed solar and storage, while On.Energy is a pureplay energy storage developer with a battery storage system integration arm.

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Investment ‘signifies trust and recognition,’ Agilitas CFO says

Agilitas Energy said last week (25 April) that it has closed a US$100 million debt financing deal with Japan-headquartered investment banking group Nomura Securities International. The deal could be upsized to US$200 million pending the completion of some of the developer’s projects.

While self-described as working on the distributed end of the market, Agilitas’ projects are front-of-the-meter (FTM), and largely located in the Northeast US, seeking to capitalise on market opportunities such as Massachusetts’s Clean Peak Standard-driven solar-plus-storage market and wider opportunities in the ISO New England region.

The company has also moved into the ERCOT, Texas market, acquiring six projects each of 9.96MW output and 20.72MWh storage capacity, and acquired a 4.8MW/23.7MWh project in New York last year.

In a June 2023 interview with Premium, Agilitas CEO Barret Bilotta said there are “clearer market signals” in the US power sector for the smaller end of the FTM market, stating that Agilitas saw “assets being very active in terms revenue management, how the market dynamics shift and change, and being able to go ahead and live and roll with that market.”

Agilitas said the financing with Nomura Securities would accelerate the buildout of around 250MW of solar and storage projects in North America over the next three years. The developer is targeting bringing online 1GW of projects in total.

The funds will go toward the existing project pipeline and the acquisition of new solar PV and storage assets across the US. Once built, projects will be owned by a joint venture (JV) Agilitas formed with CarVal Investors, which committed to investing US$350 million with Agilitas in mid-2022.

Agilitas CFO Michael Slattery said the investment from Nomura “signifies recognition and trust from a major multinational financial institution.”

Back in November, CEO Bilotta said in another ESN Premium interview that the US renewables and storage markets were in something of a state of flux, with rising interest rates and longer development timelines causing “M&A mania”.

“That is where we are seeing the most opportunity, where developers are looking to sell off development assets at their current condition to get capital to potentially salvage their others, and clear down their book as they can’t fund all of them,” Bilotta said.

The CEO noted then that in Agilitas’ sweet spot of 5MW to 20MW project sizes, values for early-stage development projects had come down about 70% from a mid-2022 peak. He also said rising interest rates had made developing projects to own and operate as an independent power producer (IPP) more attractive a business model than developing projects to flip and sell.

BESS projects need financing help ‘despite IRA tailwinds’

Meanwhile On.Energy, first featured in for its work as a system integrator on commercial and industrial (C&I) battery storage projects in Latin America, has closed a US$25 million senior secured first lien facility with funds managed by Lombard Odier Investment Managers (LOIM).

The funds include LOIM Sustainable Private Credit Strategy, which offers private loans to North American companies focused on climate solutions.

On.Energy said the working capital facility will help it grow and accelerate its project development efforts. The company is seeking to develop 400MWh of assets in ERCOT, and a further combined 1.1GWh pipeline of projects in Texas and California.

“Despite tailwinds from the Inflation Reduction Act (IRA), structured financial solutions with top-tier partners like Lombard Odier Investment Managers are essential to put critically-needed, resilient storage capacity online,” On.Energy CEO Alan Cooper said.

“Across the country, electrical grids are more vulnerable now than ever – particularly as unprecedented growth of low-cost intermittent renewables continues to drive grid decarbonisation.”

Aside from its work on behind-the-meter (BTM) system integration projects for corporate customers, which is ongoing and mostly in Latin American countries including Mexico, the company’s strategy towards the US market appears somewhat similar to Agilitas’.

On.Energy’s website currently lists four front-of-the-meter projects in construction in Texas as part of the company’s Palo Verde portfolio, each of 10MW output and 20MWh capacity.

In 2022, On.Energy raised US$100 million from UK fund SDCL Energy Efficiency Income Trust plc (SEEIT)  to fuel its expansion into the developer model in North America.

CEO Cooper spoke with ESN Premium in May last year about its pivot towards the US, noting that the Inflation Reduction Act validated that strategy, while also expressing concern that the IRA could make it harder for projects in Latin America to access capital over “at least the next couple of years,” with lenders and investors prioritising more immediate opportunities in the US.

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