Utility-scale battery storage developer esVolta hires Citi to run sales process

Utility-scale battery storage developer esVolta has retained Citi to consider strategic alternatives, said three sources familiar with the situation

Macquarie’s Green Investment Group (GIG) made an investment in the Aliso Viejo, California-based developer in January. The transaction resulted in New York-based RBP Partners remaining a substantial shareholder in the business.

RBP hired Citi to exit is remaining equity in the business, but GIG has some level of control including tag along rights for its common stock and a make whole provision on its preferred interest, added one of the sources.

The process launched in late October when teasers were distributed, and first round bids are expected likely by the end of the year.

A spokesperson for esVolta confirmed the M&A process.

GIG and Citi declined comment on the situation.

Standalone storage remains a fast-growing part of the renewable ecosystem. That pipeline is expected to accelerate if the Build Back Better Act gets passed which would allow standalone storage to qualify under the Investment Tax Credit (ITC). Speakers at the S&P Global Platts Annual Financing US Power Conference said in October it would lead to an increase in standalone storge project as opposed to co-located solar + storage projects.

esVolta has won its share of new business lately as it was selected to build a 50 MW battery energy storage system (BESS) by Northwestern Energy as part of a procurement process which wrapped up earlier this spring. Separately, it is also building a 15 MW/60 MWh battery storage project in Santa Paula, California which carries a non-utility offtake agreement, according to its website.

The company effectively launched in 2017 when it agreed to purchase 116 MWh of operational and pipeline contracted utility-scale energy storage projects from Powin Energy Corporation. Separately, esVolta entered a strategic long-term agreement with Powin Energy under which Powin agreed to be its exclusive provider of battery storage systems. Last year, it secured a USD 140m senior secured facility to finance a portfolio of its utility-scale battery energy storage projects with CIT, Siemens Financial Services, CoBank and KeyBanc Capital Markets.

Potential buyers could include solar developers looking to invest in a new vertical or expand their efforts in storage, noted one of the sources.*

*This story was originally published exclusively for NPM subscribers earlier this month.