U.S. storage financing is shifting toward late-stage hybrid and battery projects that can move quickly from development into construction, as credit investors prioritize interconnection progress, offtake visibility, and exposure to load-growth markets over early-stage pipeline scale. Pathway Power’s $150 million senior-secured facility from AB CarVal is a clear signal of that shift. The capital is not being used to buy operating assets; it is being deployed to bridge the most commercially sensitive part of the development cycle - interconnection payments, PPA execution, equipment deposits, and pre-construction equity for hybrid solar and BESS projects across U.S. RTO markets.

The transaction matters because AB CarVal is underwriting development execution, not just capacity. Pathway Power’s portfolio includes 13 hybrid and battery energy storage projects totaling around 3.2 GWac across the U.S., with a focus on RTO markets including SPP and MISO. These are not passive pipeline positions. The funding is designed to move advanced-stage projects through the final milestones needed before construction, at a time when grid stability, large-load demand, and domestic power supply security are becoming central to capital allocation.

AB CarVal’s role as senior-secured lender also says something important about the changing capital stack for U.S. storage. Development platforms with credible teams and advanced assets are increasingly using structured credit to fund milestone-heavy costs before construction equity and tax equity are fully locked. That is commercially different from traditional project finance. The lender is taking secured exposure to a portfolio whose value depends on execution milestones, grid relevance, and the ability to convert development rights into bankable construction assets.

The deal also closed alongside a separate equity investment in Pathway Power, reinforcing the point that storage developers are now assembling layered capital stacks earlier in the asset lifecycle. Equity capital validates the platform and sponsor strategy, while senior-secured credit gives the developer liquidity to make deposits, hold queue positions, negotiate offtake, and keep construction timelines intact. For late-stage storage and hybrid portfolios, this combination can be the difference between reaching notice-to-proceed and losing commercial momentum.

Enerdatics data shows why this type of financing is gaining traction. U.S. BESS M&A remained steady in 2025, with around 7 GW of project-level activity, while investors increasingly favored de-risked standalone storage assets over broad early-stage development exposure. ERCOT led transaction activity, but Enerdatics also tracked more than 2.5 GW of BESS opportunities being marketed across ISO-NE, PJM, MISO, NYISO, and SPP, where many projects are contracted, capacity-backed, or tied to policy and resource adequacy mechanisms. That creates a two-speed market: merchant-heavy ERCOT storage attracts arbitrage-focused buyers, while markets such as MISO and SPP increasingly appeal to capital providers looking for reliability-linked demand and more structured revenue pathways.

Pathway’s focus on SPP and MISO is commercially significant for that reason. These markets are becoming more relevant to storage investors because they sit at the intersection of load growth, grid congestion, industrial reshoring, and the need for dispatchable flexibility. AB CarVal explicitly linked the financing to generation and grid stability needs in critical RTOs, including demand from data centers and reshoring. That language matters. Capital providers are no longer evaluating storage only on installed MW or battery duration. They are underwriting whether a project can solve a market-specific grid problem and earn revenue from that need.

The valuation signal is also clear. Enerdatics’ U.S. market data indicates that late-stage standalone BESS projects have commanded developer premiums of around $40,000/MW, rising to at least $60,000/MW at ready-to-build stage, while BESS assets nearing COD have been valued around $1.3 million/MW and as high as roughly $2.3 million/MW under build-transfer structures. The Pathway facility sits upstream of those valuation points. By funding the final development steps, AB CarVal is effectively helping Pathway move assets into a stage where pricing power, buyer interest, and financing optionality improve materially.

For lenders, the implication is that storage credit opportunities are moving earlier, but only for the right developers. A 3.2 GWac pipeline is not enough on its own. The bankable feature is the combination of advanced-stage assets, hybrid configurations, credible management, and market locations tied to grid reliability demand. Pathway’s management team has completed more than 70 M&A transactions and developed 40 GW of projects over two decades, which likely helped reduce perceived execution risk for AB CarVal.

For developers, the message is more demanding. Early-stage pipeline ownership is losing value unless it can be converted into interconnection-secured, equipment-backed, offtake-visible projects. Developers that cannot fund deposits, keep queue positions active, or move projects through permitting and commercial negotiations may face discounted sales or forced farm-downs. Those with late-stage portfolios and experienced execution teams can use structured credit to retain more ownership and improve exit optionality.

The forward signal is that U.S. hybrid and storage financing will become more milestone-driven through 2026. Capital will continue to favor projects that can break ground within a defined timeline, serve high-growth load zones, and support grid stability in markets where conventional capacity and transmission are under pressure. Pathway Power’s $150 million facility shows that storage finance is no longer waiting for COD. For the right assets, credit capital is moving into the development gap before construction  and that could become one of the most important financing channels for U.S. BESS platforms over the next cycle.

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