Avantus partners with APS to supply electricity to thousands of Arizona homes

In a significant development for energy infrastructure in Arizona, Aypa Power, a company within the Blackstone portfolio, has successfully secured a financing package totaling $398 million for the Pediment Battery Energy Storage System (BESS). This project, which boasts a capacity of 250 MW/1,000 MWh, is located in Mesa, Arizona and is part of a broader strategy to enhance the state's energy capacity. With Arizona aiming to more than double its energy capacity by 2035, this financing reflects Aypa's commitment to supporting this transformation. The financing was structured to include a construction-to-back-leverage loan, a tax credit transfer bridge loan, and letters of credit, demonstrating a well-coordinated financial effort. Key financial institutions, namely Société Générale, ING Capital LLC, and Bank of America, played significant roles in facilitating this financing, illustrating a strong belief in the project's potential to impact local and regional energy needs positively. The Pediment BESS project is expected to provide considerable benefits, including supporting the increasing demand from the region's growing data center market and enabling better integration of renewable energy sources. The site will operate under a 20-year tolling agreement with the Salt River Project (SRP) and is anticipated to have an impressive economic impact. Over the first two decades, it is projected to bring in more than $16 million in economic benefits, with a substantial $14 million earmarked for property tax revenue to Maricopa County. Bill Nguyen, Executive Vice President of Finance at Aypa Power, emphasized that the completion of this financing is indicative of the company's capacity to manage large-scale projects effectively. Environmental and economic considerations are critical as Arizona continues to grapple with rising energy demands, especially following a record-setting summer in 2024 which saw consecutive days with temperatures reaching or exceeding 100 degrees Fahrenheit. This situation heightened the urgency for reliable energy solutions, making the energy storage project pivotal in transitioning to a more reliable and sustainable energy grid. The innovative approach in the financing not only highlights Aypa’s strategic planning but also demonstrates a collective commitment among diverse financial partners to invest in Arizona's clean energy future. As operations for Pediment BESS are expected to commence in 2026, this project aligns with wider trends in energy storage development across the country. Aypa Power's extensive experience in energy storage since its first project began operating in 2018 provides a solid foundation for the timely execution and long-term success of these initiatives. Furthermore, it reflects a broader hope among stakeholders for a robust and flexible energy economy in Arizona, contributing to local job creation and renewable energy expansion initiatives.