Yesterday, Cypress Creek Renewables announced that the 162-MW Wagyu solar PV project in Brazoria County, Texas is now delivering power to the grid. Located near Houston, Texas, the project is owned by Cubico Sustainable Investments.
Project construction was performed by RES (Renewable Energy Systems). In addition to acting as the original project developer, Cypress Creek is also providing ongoing operations and maintenance and asset management for Wagyu.
Wagyu has the unique combination of a 15-year corporate PPA from Starbucks and a 12-year physical hedge with BP. The project won an award from IJGlobal for the portfolio deal.
IJGlobal noted, “[t]he Wagyu project is particularly notable as one of the growing number of Texas solar projects to be contracted under a hedge rather than, or in addition to, a power purchase agreement. Merchant risk was mitigated by cross-collateralizing the back levered debt across the three projects and by including a tracking account to help meet balancing obligations under the energy hedge. Since the hedge provider did not provide a tracking account, this feature had to be provided by the lenders, a very innovative step.”
Sarah Slusser, CEO of Cypress Creek, said: “Wagyu is Cypress Creek’s largest project to date and our twenty first project in Texas to reach commercial operation, highlighting our team’s deep experience developing, building and financing projects in Texas. The sophistication and complexity of the deal structure provided an excellent opportunity for our finance team to flex their creativity. The entire Cypress Creek team is thrilled to work alongside Cubico in creating valuable projects that benefit communities, bringing jobs, clean energy, and a tax base for the future.”
Cypress Creek collaborated with Cubico on the tax equity and the debt financing for the project. Tax equity was provided by U.S. Bank, while project finance debt was provided by HSBC, NORD/LB, and Rabobank.