Lighthouse BP has closed on a $380m financing package for two PV projects under construction in Texas totaling 316MW in capacity, with commercial operations expected by the fourth quarter.

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Bank of America provided tax equity financing for the 163MW Elm Branch and 153MW Briar Creek arrays, which are sited 40 miles (64km) south of Dallas, while mandated lead arrangers Ing Capital and Societe Generale provided debt financing.

Lighthouse BP, 43% owned by UK energy giant BP, also announced power off-take deals for both future facilities: a virtual power purchase agreement (VPPA) with L3Harris for up to 100MW of capacity and a proxy generation power purchase agreement with the Capital Solutions unit of Allianz Global Corporate & Specialty for Briar Creek’s capacity.

VPPAs allow corporate renewable buyers to commit to green energy without taking physical delivery of the electricity and are based on variable-priced cash flow and renewable energy certificates.

Rather than settle on a project’s actual production, a proxy generation PPA tracks what it should have produced, had it operated at a pre-determined operational efficiency level. It allows a project to hedge against the correlated risk of both generation and power price. In this case, the Allianz unit provided the hedge.

“This transaction is a demonstration of the low risk and stable yield opportunities that renewable energy projects offer to investors, the quality and bankability of our developed assets and the confidence that top tier investors have in [us],” said Kevin Smith, Lighthouse BP’s Americas CEO.

Elm Branch and Briar Creek, which together will offset 370,000 tonnes of CO2 annually, are further evidence of large PV projects being sited relatively close to major metropolitan areas in Texas, now the top US state for utility-scale solar development, according to national trade group the Solar Energy Industries Association.

This trend is facilitated by availability of privately-owned land for leasing to host both arrays and related battery storage systems that is near existing high-voltage transmission lines. Solar resource in central, north and south Texas where Austin, Dallas, Fort Worth and Houston are located is generally good but inferior to what is available in the western half of the state.

Insolation in the blazing Chihuahuan Desert is among the country’s best and where most of the 77GW of projects under development are located in the largest US state power market.