Canadian Solar announced on September 8th that its wholly owned subsidiary, Recurrent Energy, closed on a debt facility with Santander Bank, N.A. (Santander) and a tax equity investment commitment with U.S. Bancorp Community Development Corporation (USBCDC), securing financing for the 100 megawatt (MWac) Mustang solar power project. Recurrent Energy will be the managing member and plans to own and operate the project, currently under construction in California.
Under the agreements, Santander Bank will provide $165 million in construction lending, a tax equity bridge loan, and a term loan option, for the Mustang solar project. USBCDC is making a tax equity investment in the project, under a separate agreement.
"This agreement with leading investors such as Santander and USBCDC demonstrates our ability to develop consistently bankable solar projects," said Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar. "Securing financing for the Mustang project is an important milestone as we work to execute on our pipeline of late stage projects."
"USBCDC is excited to partner with Canadian Solar and Recurrent on this investment, which will lead to economic development and job creation in Kings County, while providing additional renewable energy resources to California electric customers," said Adam Altenhofen, vice president of U.S. Bancorp Community Development Corporation, which invested $101 million in renewable energy tax credit equity in the project.
The Mustang project, covering an area of approximately 1,000 acres in Kings County, is expected to reach commercial operation in the fourth quarter of 2016. The project began construction in summer 2015 with Blattner Energy serving as the provider of Engineering, Procurement, and Construction services ("EPC"). The Mustang project is expected to generate enough clean solar energy to power approximately 28,000 homes. The electricity and associated renewable energy credits (RECs) generated by the facility will be sold under long-term power purchase agreements.
