Pathway Power has closed a $150 million senior-secured debt facility with funds managed by AB CarVal to fuel late stage development and construction of its utility scale hybrid “solar plus storage” and standalone BESS projects.
Pathway Power, a San Diego-based independent power producer (IPP) founded in 2022, has secured a $150 million senior-secured debt facility from funds managed by AB CarVal. This financing supports late stage development and construction activities for the company’s portfolio of utility scale hybrid solar plus storage and standalone battery energy storage system (BESS) projects across U.S. Regional Transmission Organization (RTO) markets.
The facility is a senior-secured structured credit arrangement designed to address a critical financing gap in renewable project development: the high upfront capital needs during late stage development and pre construction phases. Proceeds fund interconnection queue deposits, power purchase agreement (PPA) security requirements, long lead equipment deposits (e.g., batteries and inverters), and other pre construction and construction equity costs.
It closed concurrently with a separate (undisclosed) equity investment, creating a blended capital structure that minimizes dilution while providing immediate liquidity. This approach allows Pathway to accelerate project timelines, retain greater ownership/control, and de-risk advancement toward commercial operations and tax equity/project finance phases. AB CarVal’s involvement highlights growing institutional appetite for specialized energy transition credit in hybrid/storage assets.
This marks a notable innovation in clean energy financing, shifting away from reliance on dilutive early equity for these “valley of death” pre construction expenses. It builds on Pathway’s prior innovative facilities, such as the Rabobank-led interconnection financing facility (announced November 2024) that supported its broader pipeline.
What is Pathway Power?
Pathway Power develops flexible, high capacity hybrid (solar/wind + storage) and standalone storage assets tailored for large load customers (e.g., data centers, manufacturing), utilities, and grid operators. It emphasizes domestic content (U.S. labor, American steel) and advanced analytics/AI for grid integration and optimization.
Key metrics include:
- ~3.2 GWac current pipeline across ~13 hybrid and BESS projects, primarily in high growth SPP (Southwest Power Pool) and MISO (Midcontinent Independent System Operator) markets. These regions face surging demand from data centers, AI, and manufacturing revival, alongside curtailment challenges for renewables that storage can mitigate.
- Broader development pipeline/positions supporting multi-GW ambitions (earlier references to 6 GW total pipeline).
- Near term focus: Over 1 GW expected to begin construction in 2026-2027, including seed assets like the Greenridge (Texas: 150 MW solar + 150 MW/4-hour BESS) and Foxtrot (Arkansas: 150 MW/4-hour BESS) projects.
The leadership team, Founding Partners Jam Attari (CEO), Jared Quient, and Macsun Frederick, plus Managing Partner/CIO Bill Gulley, brings deep experience: over 70 M&A transactions and 40 GW of prior project development across multiple platforms. This track record facilitates site acquisition, partnerships with developers/EPCs/utilities/financiers, creative structuring (e.g., multi party PPAs), and rapid execution.
Prior capital includes a $25M equity investment from Japan’s Renova (via Marathon Capital) and commitments like $36M from The Forest Road Company (2022). Recent equity from Igneo Infrastructure Partners further bolsters the platform.
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Strategic and Market Implications
- Timing and Market Fit: The deal aligns with explosive demand for dispatchable clean capacity amid data center/AI load growth, grid reliability needs, and renewable integration challenges. SPP/MISO hybrids/storage address oversupply/curtailment while providing firm power, highly valuable in these markets.
- Risk Management: By using debt for development costs (often backed by secured interests in projects/assets), Pathway reduces equity burn and development risk exposure for sponsors. AB CarVal (part of AllianzBernstein’s alternatives, with significant sustainable investments) gains exposure to a seasoned team and advanced stage assets with visible paths to revenue.
- Broader Sector Signal: This facility signals maturing financing options for late stage storage/hybrid projects, potentially lowering overall capital costs and speeding deployment. It complements tax credits (e.g., ITC for storage), offtake contracts, and eventual project level non-recourse financing. Norton Rose Fulbright advised the lender; other counsel included Foley & Lardner.
- Competitive Positioning: Pathway differentiates via analytics driven portfolio management, focus on RTO-specific needs, and a risk managed approach to building a scalable IPP. Its pipeline targets “when needed” reliable clean energy, positioning it well against pure solar/wind developers.
Successful deployment could advance several hundred MW into operations within 1-2 years, generating construction jobs, tax revenue, and grid benefits while de-risking the full pipeline for further capital raises or asset sales/recycling. Challenges in the sector (interconnection delays, supply chain, permitting, and offtake pricing) remain, but the experienced team and targeted financing mitigate these.
This $150M debt raise strengthens Pathway Power’s momentum as an emerging IPP, enabling faster scaling in a high demand environment for flexible clean energy assets. It exemplifies innovative private credit’s role in bridging gaps in the U.S. energy transition.
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