US loan to facilitate utility-scale solar + storage in Puerto Rico

The US Department of Energy (DOE) Loan Programs Office (LPO) announced a conditional commitment for a loan guarantee of up to $861.3 million to Clean Flexible Energy. The money will be used to finance the construction of two solar PV farms equipped with battery storage and two standalone battery energy storage systems (BESS) in Puerto Rico.

The facilities will be located in the municipalities of Guayama (Jobos) and Salinas and will help deliver clean, reliable, and affordable power throughout Puerto Rico.

The borrower is an indirect subsidiary of AES Corporation (AES) and TotalEnergies Holdings USA, Inc. and is managed under a joint venture agreement between the two. 

Collectively, the project comprises 200MW of solar PV and up to 285MW (1,140MWh) of stand-alone BESS capacity. Annually, the solar PV installations will produce approximately 460,000MWh of energy.

The operation of the solar and storage systems — collectively known as Project Marahu — is expected to eventually replace existing fossil fuel-based generation and reduce emissions by nearly 2.7 million tonnes of CO2e per year, an amount roughly equivalent to the annual emissions of around 533,000 gasoline-powered passenger vehicles. 

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LPO borrowers are also expected to develop and ultimately implement a comprehensive Community Benefits Plan that ensures community and labor engagement, improves the well-being of residents and workers, and incorporates labor standards during construction, operations, and throughout the life of the loan guarantee.   

The Project Marahu team includes two community relations managers who are from the Guayama community and a group of local community engagement advisors. Local labour leaders will be engaged in the construction and operations planning at both the Jobos and Salinas sites.

AES, through existing facilities operating in Puerto Rico, has built partnerships with the Technological Institute and the Polytechnic University of Puerto Rico — both of which are minority-serving institutions.

The financing for this project would be through the Energy Infrastructure Reinvestment (EIR) programme under Title 17 Clean Energy Financing Section 1706. Created by the Inflation Reduction Act, EIR can finance projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations or enable operating energy infrastructure to avoid, reduce, utilise, or sequester air pollutants or greenhouse gas emissions.

While this conditional commitment indicates DOE’s intent to finance the project, DOE and the company must satisfy certain technical, legal, environmental, and financial conditions before the Department enters into definitive financing documents and authorises the funding of the loan. 

Originally published on renewableenergyworld.com