Macquarie Capital, Advanced Microgrid Solutions and CIT Close Industry-First Battery Storage Project Financing
New York, 27 Mar 2017
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Macquarie Capital, the corporate advisory, capital markets and principal investing arm of Macquarie Group ("Macquarie") (ASX: MQG; ADR: MQBKY), today announced the closing of the first non-recourse project financing of battery-based energy storage systems with CIT Bank.
The financing, led by CIT, backs a 50MW fleet of behind-the-meter, battery storage systems located in certain grid-constrained pockets of the West Los Angeles Basin service territory of Southern California Edison ("SCE") that Macquarie Capital acquired from Advanced Microgrid Solutions ("AMS") in August 2016.
Since the acquisition, Macquarie and AMS have been jointly developing and constructing the portfolio, which is expected to come online in phases over the next 12-24 months.
"Macquarie Capital is proud to have closed this first-of-its-kind financing for these critical battery storage infrastructure assets in Southern California," said Michael Silverton, Head of Macquarie Capital for the US and Latin America.
"As an active developer in infrastructure assets globally, Macquarie believes there is tremendous opportunity for this asset class, and looks forward to continuing to grow its presence with leading innovators in the space including AMS, CIT and Tesla," said Nick Butcher, Global Head of Infrastructure for Macquarie Capital.
"CIT is pleased to achieve this landmark project finance transaction, further demonstrating our commitment to supporting innovation and sustainable solutions in the energy sector," said Mike Lorusso, group head and managing director of CIT’s Energy Finance business. "Our deep expertise and track record of execution in financing distributed power assets allowed CIT to design a market-leading solution in support of Macquarie Capital, AMS and Tesla. We look forward to further building on our relationship with these pioneers," said Rhys Marsh, director in CIT’s Energy Finance business.
The fleet of energy storage systems, which will be located at various large-load commercial,industrial and government host sites in Los Angeles and Orange counties, will be used for utility grid services including flexible and reserve capacity, solar integration and voltage management in addition to retail energy services such as demand management, back up generation and enhanced power quality.
AMS, which led the development of the portfolio, will serve as the asset manager of the projects.
"Macquarie is financing a revolution in the energy industry," said Susan Kennedy, CEO of AMS.
"The era of energy storage has begun." SCE, which is California’s second largest utility, will purchase capacity from the Macquarie-owned fleet of behind-the-meter, battery-based energy storage systems under 10-year capacity contracts to provide load reduction services as part of SCE’s plan to modernize the grid by 2022.
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About Macquarie and Macquarie Capital
Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. Macquarie’s main business focus is making returns by providing a diversified range of services to clients. Macquarie acts on behalf of institutional, corporate and retail clients and counterparties around the world. Founded in 1969, Macquarie operates in more than 70 office locations in 28 countries. Macquarie employs approximately 13,800 people and has assets under management of over $377 billion (as of September 30, 2016).
Macquarie Capital comprises Macquarie Group’s corporate advisory, capital markets and principal investing capabilities. Macquarie Capital’s expertise spans a variety of industry sectors including telecommunications, media, entertainment, gaming, financial institutions, consumer, leisure, energy, resources, real estate, infrastructure, utilities and renewables.
Macquarie Capital's Power, Utilities and Renewables team combines corporate advisory expertise and principal investing experience with a dedicated focus on companies operating in the generation, transmission, distribution, retail energy marketing, midstream, water, solar, wind, storage, biomass, and waste industries. With dedicated power, utilities and renewables professionals in New York, Toronto and Austin, Macquarie Capital is a substantial and active player in the North American market.
About Advanced Microgrid Solutions
Advanced Microgrid Solutions (AMS) is pioneering the use of advanced energy storage systems for electric utility grid support. The company designs, finances, installs and manages advanced energy storage solutions for commercial, industrial and government building owners. AMS’s unique fleet management software provides optimized resource management, cost reduction and revenue generation for large scale energy users. AMS is developing the first fleet of Hybrid Electric Buildings® in the world for The Irvine Company in Irvine, California.
Founded in 1908, CIT (NYSE: CIT) is a financial holding company with more than $64.2 billion in assets. Its principal bank subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has more than $30 billion of deposits and more than $40 billion of assets. It provides financing, leasing and advisory services principally to middle market companies across more than 30 industries primarily in North America, and equipment financing and leasing solutions to the transportation sector. It also offers products and services to consumers through its Internet bank franchise and a network of retail branches in Southern California, operating as OneWest Bank, a division of CIT Bank, N.A. cit.com