Primergy has raised $588 million of debt to build Ash Creek, a 408 MWac solar project in Hill County, Texas. On the same day it announced that Microsoft would buy the plant's full output. The loan is the largest single-project solar debt package Enerdatics records in the US in the first half of 2024. Per megawatt, though, it is not the largest at all, and one of its three parts is not really a construction loan.
Key takeaways
- Primergy Solar secured $588 million of debt from a consortium led by MUFG and SMBC, announced on 11 March 2024, for the 408 MWac Ash Creek solar project in Hill County, Texas.
- The $588 million Ash Creek financing comprises a construction loan, a tax credit transfer bridge loan and related letters of credit, with BNP Paribas, Commerzbank, Credit Agricole CIB, ING Capital, KeyBanc Capital Markets, NORD/LB and Rabobank as coordinating lead arrangers.
- Primergy signed a long-term power purchase agreement with Microsoft for the full 408 MWac capacity of Ash Creek, announced alongside the financing; the tariff and term were not disclosed.
- Ash Creek was originally developed by Orion Power Generation and acquired by Primergy in 2021, with SOLV Energy as EPC contractor, construction starting in March 2024 and commercial operation expected by September 2025.
- At about $1.44 million per MWac, the Ash Creek debt sits in the middle of six US single-project solar construction financings Enerdatics records with disclosed capacity in the first half of 2024, which range from $1.05 million to $1.84 million per MW.
What is inside the $588 million?
Three different instruments sit under one headline number. The first is a construction loan, which pays contractors while the plant is being built and is normally refinanced or converted once the project is running. The third is a set of letters of credit, which are bank guarantees that a project posts to counterparties such as the grid operator or the power buyer instead of tying up cash.
The second piece is the one that changes how the total should be read. A tax credit transfer bridge loan lends against the money a project expects to receive when it sells its federal tax credits. Under the Inflation Reduction Act, owners of clean energy projects can sell those credits for cash to unrelated buyers, and the bridge lets a developer use that future cash during construction. It is repaid when the credits are sold, not out of the plant's power revenue over the following decades.
That matters for anyone comparing Ash Creek with older solar financings. Part of the $588 million is effectively an advance on a tax credit sale. The record does not split the total between the three pieces, so the share that is long-term debt cannot be read from it.
How does the Microsoft contract shape the loan?
It gives lenders a named buyer for every megawatt. Primergy signed a long-term power purchase agreement with Microsoft for the full 408 MWac, announced on the same day as the financing. Contracted revenue from a large, creditworthy buyer is what most project lenders want to see before they size a construction loan, and here the contract covers the whole plant rather than a slice.
The details stay private. Enerdatics' record of the Microsoft contract gives neither tariff nor duration. It also notes that the project has a battery with a total capacity of 300 MW, sits on a 3,480-acre site and is expected to pay about $100 million in taxes to Hill County over its life. The financing record describes the loan as being for the 408 MW solar project, so the per MW figures below are measured against solar capacity only.
The bank group is broad. MUFG and SMBC led, with seven coordinating lead arrangers: BNP Paribas, Commerzbank, Credit Agricole CIB, ING Capital, KeyBanc Capital Markets, NORD/LB and Rabobank. Latham & Watkins advised Primergy and Skadden Arps Slate Meagher & Flom advised the lenders. MUFG also lent to Sabanci's Oriana project in Texas in the same period, and to Recurrent Energy's Bayou Galion financing, which also has Microsoft as its power buyer.
Where does Ash Creek sit against other US solar loans?
In the middle on a per MW basis, at the top in absolute size. Across January to June 2024, Enerdatics records 59 US solar debt financings, most of them small loans for distributed projects. Among the single-project utility-scale construction loans, Ash Creek's $588 million is the largest. The next is BrightNight and Cordelio Power's $414 million for the 300 MW Box Canyon project in Arizona.
Enerdatics' data shows a spread of nearly $0.8 million per MW across six of those financings with disclosed capacity. Sabanci's $243 million for the 232 MW Oriana project in Texas works out at about $1.05 million per MW. Box Canyon is about $1.38 million. Matrix Renewables' Pleasant Valley loan in Idaho is about $1.42 million. Ash Creek is about $1.44 million. Lightsource bp's Starr and Second Division financing, which also includes tax credit transferability facilities, is about $1.47 million across 236 MW. Arevon's $352 million for the 191 MW Posey project in Indiana is the highest, at about $1.84 million, although $35 million of it is a letter of credit facility.
The two Texas loans that include tax credit facilities, Ash Creek and Lightsource bp's, land within $0.03 million per MW of each other. Oriana, the Texas loan without a disclosed tax credit component, sits well below both.
What does the deal signal for US solar project finance?
It signals that tax credit transferability had become a regular feature of large US solar financings by early 2024: two of the six loans above include it. Banks were no longer lending only against power revenue. They were also lending against the expected sale of tax credits, and packaging that alongside construction debt and letters of credit in a single deal. Headline loan sizes from this period therefore mix two kinds of risk: whether the plant performs, and whether the credits sell as planned.
For Primergy, Ash Creek is a project several years in the making. Orion Power Generation originally developed it, Primergy bought it in 2021, construction began in March 2024 with SOLV Energy as engineering, procurement and construction partner, and commercial operation was expected by September 2025. Primergy says the plant should power about 90,000 homes a year.
The open question is the battery. The power contract record lists a 300 MW battery at the site, the financing record does not mention one, and neither says how storage will be funded or what it will earn.
Frequently asked questions
How much debt did Primergy raise for Ash Creek? Primergy secured $588 million from a consortium led by MUFG and SMBC, made up of a construction loan, a tax credit transfer bridge loan and related letters of credit.
Who buys the power from Ash Creek Solar? Microsoft signed a long-term power purchase agreement for the full 408 MWac capacity of Ash Creek. The tariff and contract length were not disclosed.
When will Ash Creek Solar start operating? Construction began in March 2024 and commercial operation was expected by September 2025. The project is in Hill County, Texas, with SOLV Energy as EPC contractor.
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