Texas approves US$1.12 billion loan for natural gas plant
In a significant move to bolster the state’s power grid, the Texas government has approved a landmark US$1.12 billion loan to finance the construction of a new 1,350-megawatt (MW) natural gas-fired power plant in Ward County. The facility, to be developed by Competitive Power Ventures (CPV) Basin Ranch, is projected to begin supplying electricity to the ERCOT grid by 2029.
The loan, issued from the Texas Energy Fund (TxEF), marks the largest capacity project the fund has financed to date. The TxEF program provides low-interest loans specifically for projects that add “dispatchable” power—energy that can be generated on demand—to the state’s electrical grid. The financing will cover approximately 60% of the plant’s total estimated cost of $1.88 billion, featuring a 20-year term and a 3% interest rate.
“This investment is a crucial step in ensuring the reliability and stability of the Texas grid for the future,” said a state official familiar with the program.
The CPV Basin Ranch plant will connect to ERCOT’s West Load Zone and must adhere to strict performance standards mandated by the loan program. Once operational, it will provide a substantial and reliable source of dispatchable capacity to the grid.
To date, the TxEF has financed over 3,100 MW of new power generation capacity. The fund’s current pipeline remains robust, with 12 additional applications representing 5,861 MW of proposed capacity under active review. Each project undergoes a competitive selection process and rigorous financial analysis.
This loan agreement falls under the ERCOT Generation Loan Program, a state initiative designed to incentivize the construction of dispatchable power plants through favorable financing. More details on the TxEF and its programs are available on the website of the Public Utilities Commission (PUC).
