AES Clinches Financing for Southern California Repowering Projects

---

Researched by Industrial Info Resources (Sugar Land, Texas)--AES Corporation said Wednesday that it has secured $2 billion in financing for its 1,384-megawatt (MW) Southland repowering projects in Southern California. The projects encompass 1,284 MW of combined cycle gas capacity and 100 MW of battery-based energy storage under 20-year contracts with Southern California Edison, a unit of SCE Corporation (NYSE: SCE) (Rosemead, California). Industrial Info is tracking $15.7 billion in active AES projects, including $3.4 billion in California.

AES said it closed on long-term, non-recourse financing for the projects. According to Investopedia, non-recourse debt is a type of loan secured by collateral, which is usually property. If the borrower defaults, the issuer can seize the collateral but cannot seek out the borrower for any further compensation, even if the collateral does not cover the full value of the defaulted amount. AES said it will contribute about $350 million in equity to finance the balance of the total cost of $2.3 billion.

The new capacity will replace 3.9 gigawatts (GW) of less efficient existing gas-fired capacity, AES said in a press release.

A $100 million battery energy storage unit at the existing Alamitos site at Long Beach is part of the package. The project includes construction of three 100-MW Advancion battery energy storage units, plus balance-of-plant equipment. Construction is expected to kick off in mid-2019, with total project completion in first-quarter 2023. For more information, see Industrial Info's project report.

AES Executive Vice President Tom O'Flynn said: "This transaction is one of the first project financings for battery-based energy storage, demonstrating once again AES' leadership in the energy storage industry."

The 1,284 MW of new combined-cycle gas-fired capacity will be constructed by Kiewit Power Constructors Company, which is part of Kiewit Corporation (Omaha, Nebraska).

AES currently has a total of 3,941 MW of gas-fired capacity operating at its Alamitos, Redondo Beach and Huntington Beach facilities, all of which are expected to retire by the end of 2020.

Construction began last month at AES' Huntington Beach site. Construction at the Alamitos site is expected to begin this month. Commercial operation for the gas-fired capacity is expected in 2020.

The $963 million Alamitos repower project comprises construction of a 642-MW natural gas-fired, combined cycle unit. For more information, see Industrial Info's project report. For related information, see May 23, 2017, article - Kiewit Readies for $6 Billion in Project Kickoffs, $12 Billion in Completions for 2017

The $500 million Huntington repower project includes construction a 644-MW power plant and the dismantlement of the current plant. For more information, see Industrial Info's project report and June 13, 2017, article - Construction Begins on New Huntington Beach Power Station.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.