(Bloomberg) — A unit of Macquarie Group Ltd. tapped CIT Group Inc. to finance part of a $200 million portfolio of energy storage systems it’s developing in California, marking the largest battery project to get bank financing.
The 50 megawatts of storage systems are being installed at commercial and industrial sites in Los Angeles and Orange counties, according to Michael Silverton, head of Macquarie Capital for the U.S. and Latin America. The companies didn’t say how much financing CIT is providing.
Macquarie, the world’s biggest manager of infrastructure assets, acquired the projects in August from Advanced Microgrid Solutions LLC. The two companies are developing them jointly, and the project will go into service in phases over the next 12 to 24 months.
Large-scale batteries have been long considered the missing link to fully integrate solar and wind power into electric grids, but lenders have been slow to finance projects, in part because the systems have lacked reliable revenue streams. That’s changing as costs fall and technology improves, giving utilities confidence to offer storage developers long-term contracts.
“There are a lot of eyes on this sector,” Macquarie Capital Senior Vice President William Demas said in an interview. “This is the first of billions in financings that will happen over the next couple of years.”
Macquarie’s project — using Tesla Inc.’s Powerpack 2 lithium-ion batteries — will have three separate revenue streams.