Lydian Energy expects to deploy up to $10 billion into power generation and energy storage infrastructure over the coming years as the company advances four projects toward final investment decision, Green Street Infrastructure can reveal.
The firm, owned by the $1 billion Excelsior Energy Capital Fund II, is positioning itself as a large clean energy infrastructure platform with a capital structure centered on tax credit monetization, traditional bank debt, sponsor equity and a potential future holdco facility, chief executive Emre Ersenkal said in an interview.
The four projects targeted for FID this year are Atlas 12 and Atlas 13 in Arizona, the Yellow Viking project in Texas and the Yellow Barn project in New York. Atlas 12 and Atlas 13 are expected to begin construction this year.
Both hold long-term PPAs with PG&E. Lydian is finalizing EPC agreements, procurement contracts, and financing documentation for all four projects as it prepares to move them into the construction phase.
Atlas North, acquired from Hanwha Renewables in a bilateral transaction, includes more than 1,000MW of solar capacity and 450MW or 1,800MWh of battery storage. The four late-stage projects connect to the CAISO system through a 500kV generation tie line linking to the Cielo Azul Switchyard and the Ten West Link transmission line. The acquisition is Lydian’s largest to date and expands its portfolio beyond 5GW.
Lydian typically funds projects with 10% to 20% equity, with the remaining capital split between construction debt and a tax credit bridge loan, Ersenkal said. Most debt is sourced from commercial banks, though the company is evaluating a corporate level holdco facility that could involve private credit.
Lydian has worked with ING, KeyBank, CIBC and MUFG on prior project financings.
Beyond Atlas North, Lydian is building three battery projects in Texas totaling about 550MW, a 75MWac solar project in New Mexico and a 150MW four-hour battery project in Utah. The company anticipates four FIDs in 2026 and potentially six or seven in 2027 as its pipeline matures and more projects reach late-stage development.
Since inception in 2023, Lydian has drawn equity directly from its sponsor to fund acquisitions and project equity requirements. The company has not used acquisition financing and does not expect to need it in the near term. Additional equity investors are not being considered., though a holdco facility may be added as the balance sheet grows.
The company remains active in M&A, targeting mid- and late-stage projects with offtake in place or a credible path to securing it. Geographically, Lydian prefers WECC, SPP, and MISO and has mostly avoided ISO New England, the Southeast and the Pacific Northwest. It owns projects in Texas, New Mexico, Utah, Arizona and New York and recently acquired a battery project in MISO North. Lydian is open to PJM but does not yet own assets there.
Ersenkal said the company is building Lydian as a long-term operating platform with value beyond its individual assets. Decisions about an eventual sale, IPO or strategic transaction will be made later in the fund’s lifecycle. For now, the focus is on execution, financing and construction.
“We do not see ourselves slowing down,” Ersenkal said. “There will be a significant amount of financing activity as we continue to build out the portfolio.”
Originally published by Green Street Infrastructure: [View original article]
