Commercial-scale distributed energy developer Scale Microgrids has closed on a unique $225 million debt facility which will assist the company in building and operating a portfolio involving projects of diverse resource and infrastructure aims.
New Jersey-based Scale will develop those type of on-site power projects in its home state, as well as California, Oregon, District of Columbia, Pennsylvania, Delaware, Colorado, North Carolina and New York.
The debt facility is defined as non-resource project financing, meaning it is secured only by the assets and contracts without a guaranty from Scale or its private equity owner Warburg Pincus. The designation meets and exceeds a higher bar among lenders and could imply stronger confidence in the business plan, according to reports.
Warburg Pincus initially seeded Scale Microgrids with a $300 million line of equity commitment in late 2019. The startup since has delivered multiple DER projects across numerous industries in the U.S.
The new, non-resource debt facility opens the door for microgrid development around combined heat and power (CHP), community and rooftop solar, battery energy storage and two-way electric vehicle charging infrastructure.
“This deal serves as proof that the renewable energy landscape is changing. Microgrids, by their nature, incorporate a number of different technologies - and capital providers’ willingness to step up and support a diverse “first of its kind'' portfolio further supports Scale’s vision of bringing microgrids and DERs to the masses. We’re thrilled to be leading this transition, and powering the world with distributed energy,” said Ryan Goodman, co-founder and CEO at Scale Microgrids.
KeyBanc Capital Markets and City National Bank acted as joint lead arrangers on the financing round. Others involved in helping Scale Microgrids realize this funding goal included Energetic Insurance, engineering and construction contractor Black & Veatch, while other partners contributed market forecasts and legal counsel.
”This transaction is another example of our ongoing commitment to the distributed energy transition,” said Andy Redinger, head of KeyBanc Capital Markets’ Utilities, Power & Renewable Energy Group. “We’re excited to partner with a tier-one platform like Scale Microgrids as they execute on their strategy to deliver high-quality distributed energy assets to the market.”
Scale Microgrid’s project developer spans over the past three years and coast to coast in the U.S. These include solar and storage hybrid systems for central California agriculture, a solar-storage microgrid and EV charging system for a regional public transit authority, as well as a combined 4.5-MW CHP, 2.5-MW solar PV and 2.5-MWh battery storage project at the Gallaudet University for the deaf in Washington D.C.
Other customers deploying Scale's microgrids include Santa Margarita Water District (Calif.), Petaluma City Schools, Quality Custom Distribution, Trinity Fruit Co. and Almond World, among others.
In a separate report last year, research firm Wood Mackenzie estimated that the U.S. microgrid installed capacity topped 10 GW completed and another 7 GW in construction or development.
In other reports, forecasters have predicted that the value of the global microgrid market could more than triple over 10 years to $60 billion by 2030. Commercial, industrial and mission critical customers are seeking utility help or moving beyond utilities to secure power resiliency in the face of climate disasters and grid delivery challenges.
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(Rod Walton, senior editor for EnergyTech, is a 15-year veteran of covering the energy industry both as a newspaper and trade journalist. He can be reached at [email protected]).
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