Renewable Energy Finance: First Solar secures $1bn revolving credit facility to expand manufacturing operations in US and globally

Deal details: The company entered into a five-year revolving credit facility (RCF) that included participation from BofA, Citibank, Credit Agricole, Goldman Sachs, BNP Paribas, HSBC, MUFG and Standard Chartered. The financing follows ~9 GW of solar modules orders that the company has received this year from developers comprising Lightsource bp, EDP Renewable, Leeward Renewable Energy and Capital Power.

Deal rationale: The agreement enables the company to secure the necessary financial resources and flexibility to advance its business expansion initiatives both in the United States and globally. The funds obtained will support the company's strategic objective of significantly increasing its manufacturing capacity by over 8 GW from the second half of 2023 until 2026, ultimately achieving a total manufacturing production capacity of over 20 GW by 2026. The company is already making progress with the construction of a 3.5 GWdc factory in Alabama, set to commence commercial production by late 2024, as well as a 3.5 GWdc manufacturing facility in India, expected to begin operations later this year. In addition to these projects, the company aims to expand its existing footprint in Ohio by 0.9 GWdc by 2026. Furthermore, the company plans to invest up to $370 million in the construction of a new research and development centre in Perrysburg, Ohio, scheduled to be commissioned in 2024.

Enerdatics has observed more than $17bn of investments in US’ solar and battery manufacturing sectors during the first half of 2023. Meyer Burger, KORE Power and Ascent Solar are some of the companies that have raised large sums to build factories to supply components such as modules, wafers, ingots and inverters. The investments are driven by the urgent need to manufacture solar and grid-scale components domestically to reduce dependence on China and counteract supply-chain bottlenecks. Enerdatics expects this trend to continue, as incentives offered under the IRA and the vacuum created by the shortfall in equipment supply will motivate other manufacturers to secure loans to build large-scale facilities in the US.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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