Rabobank has closed a credit facility for Pathway Power to support renewable energy projects looking to connect to the US electricity grid.
The financing will support the development of Pathway Power’s 6-gigawatt pipeline of solar and storage projects, including utility-scale battery storage projects, which will provide clean energy through independent system operator (ISO) interconnection queues across the country.
Pathway Power, based in San Diego, California, is developing, constructing and operating a diversified portfolio of solar, wind and battery storage projects in major regional transmission organizations.
Norton Rose Fulbright served as Rabobank’s legal counsel, while Foley & Lardner represented Pathway Power. Rabobank acted as the sole lead arranger on the transaction, but did not disclose the size of the facility.
“This innovative letter of credit facility enables Pathway to advance a significant pipeline of renewables and battery storage projects through [ISO] interconnection queues across America under an efficient, flexible structure,” says Bill Gulley, managing partner and chief investment officer at Pathway.
As of the end of 2023, there were 12,000 projects seeking grid interconnection across the United States. The combined capacity of these projects is more than double the installed capacity across the country’s power plant fleet, according to Lawrence Berkeley National Laboratory.
This boom in new electricity projects has led to significant delays in connection approvals. On top of that, grid operators are making it more expensive for energy developers to enter the interconnection queue.
Rabobank and Pathway designed the customized facility to provide efficient capital for projects in various stages of the interconnection queue, a multi-year process governing how new electricity projects connect to the grid.
Josh Dale, head of energy transition coverage at Rabobank, says: “We’re thrilled to collaborate with Pathway Power to structure a bespoke facility to advance its robust pipeline of development projects in a cost-efficient way, while insulating Rabobank from development risk.”
