Israel-based energy infrastructure company Stark Power has entered into a definitive agreement to acquire the Cottage Grove energy campus in Minnesota, US, from Panamint Capital and Ultra Capital.
The campus comprises an operational 262MW natural gas-fired, combined-cycle power plant and an adjacent 80MW/320MW-hour (MWh) battery energy storage system (BESS).
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The site is situated roughly 20 miles south-east of Minneapolis and is connected to the Midcontinent Independent System Operator wholesale electricity market.
Stark Power noted that the power plant currently provides dispatchable electricity generation in a region where demand is growing, and where bringing on new capacity can present challenges. It holds an existing contract with the Northern States Power Company, a subsidiary of Xcel Energy.
It is set to transition to a 15-year tolling agreement with the Basin Electric Power Cooperative, starting in December 2027 and extending through 2043.
In addition to electricity, the plant supplies steam to a neighbouring 3M company’s manufacturing facility.
Plans for the site also include the construction of a battery storage project that will utilise the plant’s grid interconnection.
This BESS is contracted under a separate 15-year tolling agreement with the Northern States Power Company.
The co-location of generation and storage is intended to provide integrated energy solutions from a single site.
The Cottage Grove transaction establishes Stark Power’s second US growth platform in contracted power generation, expanding its capabilities across both power generation and data centre infrastructure.
Subject to customary conditions, the deal is set to close in the fourth quarter of 2026.
After closure, Stark Power intends to move the battery storage project forward towards its targeted commercial operation in 2028.
Stark Power CEO Michael Avidan said: “Cottage Grove is exactly the kind of asset Stark Power has been targeting. It combines operating and reliable generation near a major load centre with long-term contracted revenues and a co-located storage project using the same site and interconnection.”
Orrick, Herrington & Sutcliffe provided legal counsel, while Verdonck Partners acted as financial advisor to Stark Power on the transaction.
In July 2026, Panamint Capital started construction of a $1.7bn solar photovoltaic project at the Twin Oaks power station in Robertson County, Texas.
