Aypa Power, which develops hybrid renewable energy projects and utility-scale energy storage systems, recently finalized a $190 million financing package for the construction of its Bypass Battery Energy Storage System (BESS) in Fort Bend County, Texas. The 200 MW/400 MWh project would further establish Texas as a leader in energy storage by addressing the rising demand for power in the Houston area and improving the dependability of the state’s electrical system.
Financing Details and Key Partners
The $190 million financing includes a $68 million Construction-to-Term Loan and a $91 million Tax Equity Bridge Loan (TEBL), bringing the total construction funding to $159 million. The project also secured $31 million in Letters of Credit, with $26 million allocated explicitly for project-related expenses.
A key element of the financing is the tax equity commitment from Morgan Stanley Renewables Inc., which has pledged $94 million through a hybrid partnership flip structure. This pioneering financing model allows for the required capital to undertake large-scale projects, such as the Bypass BESS.
SMBC was Administrative Agent and Green Loan Coordinator, while Santander was Coordinating Lead Arranger. Siemens Financial Services was Joint Lead Arranger in partnership with Aypa Power, among others. This partnership has been strategic as it represents mutual commitment to developing leading-edge energy storage solutions.
A Game Changer for the Grid of ERCOT
Bypass BESS will be the very first totally contracted energy storage in the market place of the ERCOT system. The project will store excess renewable energy and release it during peak demand, improving grid reliability and stabilizing supply.
Bill Nguyen, Executive Vice President of Finance at Aypa Power, said, “This financing milestone highlights Aypa Power’s ability to deliver projects that set new standards in the market.”
He added, “As one of the first fully contracted energy storage projects in ERCOT, Bypass BESS demonstrates how innovative financing structures and strong partnerships can deliver critical infrastructure to meet the region’s growing power needs.”
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Economic Impact on Fort Bend County
Beyond its environmental and grid-stabilizing benefits, the Bypass BESS project will also contribute significantly to the local economy. During peak construction, the project will create hundreds of jobs. Once operational, the facility is expected to generate about $20 million in tax revenue, benefiting Fort Bend County long-term.
Jorge Iragorri, Head of Renewable Energy Investments at Morgan Stanley, stated the importance of the project,”We are excited to partner with Aypa Power and Blackstone on this innovative ERCOT BESS project and continue building grid infrastructure for the growing electrification needs of the U.S.”
Texas continues to lead in energy storage, and the Bypass BESS project will be key to the state’s energy future.