Arevon Energy has secured $920m in financing for its Nighthawk Energy Storage Project, a 300MW/1.2 gigawatt-hour (GWh) facility being built in Poway, California, US.
The project is expected to become operational later this year and will provide resource adequacy capacity to Pacific Gas and Electric Company (PG&E) under a long-term contract.
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When in use, the facility will have the capability to supply enough electricity for up to 385,000 homes for four hours during periods of high demand.
The financing package consists of a $482m debt facility arranged by CIBC as left lead arranger, with ING Capital, NORD/LB, Santander and Zions Bancorporation participating.
In addition, Arevon has obtained a $169m preferred equity investment structured with Goldman Sachs Alternatives to facilitate tax credit monetisation, and a $268m tax credit transfer commitment from an undisclosed corporate purchaser.
Arevon will own and operate the project once construction is complete.
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By GlobalDataOver its lifespan, the project is projected to generate more than $30m in property tax payments, supporting local schools, infrastructure projects and public services.
At peak construction, more than 130 workers were employed on-site. Local businesses reported increased activity during the construction phase.
The battery system uses lithium iron phosphate technology. The storage capability is designed to support grid reliability by charging during periods of low demand and discharging energy as needed at times of higher usage in the San Diego region.
It aligns with California’s stated goals for grid reliability and clean energy.
Latham & Watkins and Sheppard represented Arevon. Norton Rose Fulbright and Allen Matkins advised the lenders, and Milbank and Allen Matkins served as counsel to Goldman Sachs.
Arevon’s tax equity advisor was CG/CRC-IB.
Arevon chief investment officer Denise Tait said: “This transaction demonstrates how innovative capital solutions can unlock long-term investment in critical grid infrastructure, even amid evolving market and policy conditions. It reflects the strength of our financial partnerships and Arevon’s commitment to delivering durable, long-term value.”
Over the past two years, the company has closed $5.1bn in project financing.
