CIM Group's Permanent Power Closes $600 Million Construction Financing for California Solar and Storage Project

CIM Group's Permanent Power Company has closed an approximately $600 million construction financing facility for its Grape solar and energy storage project in California, comprising a $372.3 million construction-to-term loan, a $166.7 million tax credit transfer bridge loan and a $61.3 million letter of credit facility, with Truist serving as administrative agent and Wells Fargo as collateral agent. The Grape project is a 246.4 megawatt-AC solar photovoltaic installation with 150 megawatt-AC and 600 megawatt-hour battery energy storage system located in Westlands Solar Park, one of the largest permitted solar parks in the US encompassing more than 20,000 acres in California's San Joaquin Valley. The company recently signed a long-term power purchase agreement with an investment-grade regulated energy service provider for the entire capacity of solar generation and battery storage at Grape, with the project now under construction and expected to support more than 400 construction jobs while generating enough clean energy to power over 86,000 California homes annually.

 

The Financing Structure and Its Commercial Significance

 

The $600 million financing package combines three distinct instruments that address different aspects of the project's capital requirements. The $372.3 million construction-to-term loan provides the primary debt capital for project construction and automatically converts to a term loan upon completion, creating a seamless transition from construction financing to long-term project debt without requiring refinancing at a critical operational juncture. The $166.7 million tax credit transfer bridge loan enables Permanent Power to monetise the Inflation Reduction Act investment tax credits associated with the project through a transfer mechanism before the credits are formally transferred to a tax equity buyer, providing liquidity during construction that reduces equity requirements and improves overall project returns.

Avi Shemesh, Co-Founder and Principal at CIM Group, said the financing reflects the confidence of capital partners in Permanent Power's ability to develop and deliver large-scale power generation and energy storage projects, noting that the investment-grade offtaker signing a long-term PPA for full solar and storage capacity prior to completion underscores both the strength of the project and the platform approach. The full-capacity PPA with an investment-grade counterparty prior to construction completion is commercially significant because it eliminates merchant revenue risk from the project's financial model, providing lenders with the contracted cash flow certainty needed to underwrite construction-to-term financing at competitive terms for a first-lien claim on a large utility-scale asset. The combination of a contracted offtake agreement covering 100 percent of capacity and an investment-grade counterparty represents the strongest possible commercial foundation for utility-scale project finance.

 

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The Grape Project and Westlands Solar Park Context

 

Westlands Solar Park in California's San Joaquin Valley represents one of the most significant utility-scale solar development zones in the United States, encompassing more than 20,000 permitted acres in a region where agricultural water availability challenges have created opportunities to repurpose farmland for renewable energy production. The Grape project's 246.4 megawatt-AC solar capacity combined with 600 megawatt-hours of battery storage creates a dispatchable clean energy asset that can serve California's grid needs during the evening demand peaks that solar-only projects cannot serve, addressing the duck curve challenge that has made storage-paired solar increasingly valuable in the California market. The project's location within Westlands Solar Park provides access to transmission infrastructure and permitting frameworks that have already been established for the broader solar park development, reducing the regulatory risk and timeline uncertainty that often delays standalone utility-scale solar and storage projects in California.

The 86,000 California homes equivalent annual generation figure provides a useful scale reference for the project's contribution to the state's clean energy portfolio, though the more commercially significant measure is the long-term contracted revenue from the investment-grade offtaker that underpins the project's debt service capacity. California's continued clean energy procurement mandate, which requires the state to achieve 100 percent clean electricity by 2045, creates sustained structural demand for new utility-scale solar and storage capacity that supports the revenue certainty of projects like Grape throughout their operational lifetimes.

 

Portfolio Context and Broader Platform Strategy

 

Upon completion, Grape will contribute to Permanent Power Company's broader portfolio expected to comprise approximately 1,200 megawatts-AC of solar PV and 690 megawatts-AC with 2,760 megawatt-hours of battery energy storage, demonstrating the scale ambition of the CIM-backed platform across multiple projects in parallel development. The company previously secured a $400 million financing commitment from funds and accounts managed by HPS Investment Partners, part of BlackRock Private Financing Solutions, advancing the growth plan to deliver power, energy storage and transmission solutions across the US with strategic focus on assets in Qualified Rural Opportunity Zones. This dual capital structure combining project-level construction financing for individual assets like Grape with a corporate-level growth commitment from HPS and BlackRock provides Permanent Power with both the project execution capital and the strategic growth capital needed to expand its portfolio at pace.

The focus on Qualified Rural Opportunity Zones as a strategic asset location preference creates a tax-advantaged investment framework that attracts capital from investors seeking the Opportunity Zone tax benefits alongside the renewable energy investment tax credits available through the Inflation Reduction Act, potentially improving the risk-adjusted return profile of Permanent Power's projects relative to comparable assets outside Opportunity Zones. This dual tax benefit structure, combining IRA investment tax credits with Opportunity Zone tax deferral and exclusion benefits, represents a sophisticated capital structure approach that distinguishes Permanent Power from simpler renewable energy development platforms.

 

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Outlook for Large-Scale California Solar and Storage Development

 

The Grape project financing closing demonstrates that the US utility-scale solar and storage project finance market remains functional and competitive for well-structured projects with contracted offtake from investment-grade counterparties, despite the broader uncertainty created by trade policy changes affecting solar panel supply chains and the political volatility around federal clean energy incentives. Whether Permanent Power can replicate the Grape project's combination of contracted offtake prior to financing close and full-capacity investment-grade PPA across its broader development pipeline will be the critical commercial execution challenge for the platform as it scales toward the 1,200 megawatt-AC solar and 690 megawatt-AC storage portfolio target. Sustained delivery of contracted, fully financed utility-scale projects would establish Permanent Power as a credible large-scale clean energy development platform and demonstrate CIM Group's ability to execute complex renewable energy project finance transactions at institutional scale.

 

Source: BUSINESS WIRE