Loan guarantees by Loan Programs Office intend to finance grid enhancement to build resilience and expand access to affordable electricity for the people of Puerto Rico.
The U.S. Department of Energy’s Loan Programs Office announced two conditional commitments and one loan closing of over $1.2 billion in total to power producers in the unincorporated U.S. territory of Puerto Rico.
The intention is for the financing to support a project contracted with the Puerto Rico Electric Power Authority (PREPA) to gradually replace Puerto Rico’s fossil fuel generation assets with renewable energy and battery storage systems through 2032.
Each of the projects announced includes a significant amount of energy storage, the LPO reports. As part of its procurement plan, PREPA seeks to install 1,500 MW of battery storage and requires a minimum capacity of storage to be co-located with each utility-scale solar project.
PREPA has a goal of installing 3.75 GW of solar, and these resources will help move the utility toward that goal while also adding reliability and stability to PREPA’s aging system. In addition, the Puerto Rico Energy Public Policy Act (Act 17) requires Puerto Rico Electric Power Authority (PREPA) to stop coal-fired energy generation by 2028 and shift to a 100% renewable energy mix by 2050.
LPO’s closed and conditionally committed financing supports over 100% of the capacity PREPA aimed to procured under its initial request for energy storage project proposals, the first of six.
The announcements include:
- The closing a $584.5 million loan guarantee to subsidiaries of Convergent Energy and Power to finance a 100 MW solar facility with a 55 MW / 55 MWh battery energy storage system (BESS) in the municipality of Coamo and BESS installations in the municipalities of Caguas (25 MW / 100 MWh), Penuelas (100 MW / 400 MWh), and Ponce (up to 100 MW / 400 MWh),
- A conditional commitment for a loan guarantee of up to $133.6 million to a subsidiary of AL-Infinigen Operating for a 32.1 MW solar facility with an integrated 14.45 MW/(4.76 MWh BESS, and a co-located, standalone 50 MW /200 MWh BESS expansion in the municipality of Yabucoa, and
- A conditional commitment for a loan guarantee of up to $489.4 million to a subsidiary of Pattern Energy Group for three stand-alone BESS in the municipalities of Arecibo (50 MW / 200 MWh), and Santa Isabel (50 MW / 200 MWh and 80 MW / 320 MW), and a 70 MW solar facility with an integrated BESS in the municipality of Arecibo.
These projects, if all finalized, would more than double LPO’s support for utility-scale solar generation and battery energy storage in Puerto Rico.
The island of Puerto Rico has long been reliant on imported fuel, which is expensive and polluting. The island often experiences damage from hurricanes, such as Hurricane Ernesto in August 2024, which reportedly left half the island without electricity. As a its historically underinvested infrastructure, Puerto Ricans are often without power, while also facing energy costs that are twice the U.S. average.
LPO’s initial loan to a power producer in Puerto Rico, Project Marahu, closed in October 2024 and when complete will add more than 200 MW of solar and up to 285 MW of stand-alone energy storage to Puerto Rico’s grid.
In September 2023, Sunnova secured a $3 billion partial loan guarantee agreement with the LPO, equating to a 90% guarantee of up to $3.3 billion of term loans. The funds will support loans originated by Sunnova under Project Hestia, a nationwide program designed to increase access to solar and virtual power VPP services for disadvantaged communities who otherwise may not be able to secure loans for residential solar projects.
These conditional loans follow several actions taken by the DOE help strengthen Puerto Rico’s grid. In December 2022, the Biden administration authorized $1 billion for the establishment of the Puerto Rico Energy Resilience Fund (PR-ERF), which is administered by the DOE’s Grid Deployment Office. The $1 billion funding package is supporting residential solar and storage projects in Puerto Rico, with the first installation announced that include subsidized residential solar and battery storage systems through the PR-ERF’s Programa Acceso Solar.
The LPO’s Active Energy Infrastructure Reinvestment Projects by Type of Borrower page provides up-to-date list of all LPO announcements in Puerto Rico. For more information on LPO’s assessment of these projects as eligible for EIR financing, see LPO’s July 2023 blog post.
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