Vikings solar-plus-storage project financing driven by
Arevon's innovative approach to combine the Inflation Reduction
Act's tax credit transferability provisions with debt in a
$529 million financing
package
NEW
YORK and SCOTTSDALE, Ariz., Nov. 8, 2023
/PRNewswire/ -- Arevon Energy, Inc. today announced it has
closed financing on the Vikings solar-plus-storage project with a
combination of debt financing and tax credit transfer. Arevon
secured a commitment with J.P. Morgan to purchase $191 million of investment tax credits and
production tax credits, among the nation's first transactions
announced to date that leverage the Inflation Reduction Act's
transferability provision. The additional $338 million debt facility was financed with
MUFG, BNP Paribas, Sumitomo Mitsui Banking Corporation, and First
Citizens Bank, who acted as Coordinating Lead Arrangers. National
Bank of Canada also participated
as a lender.
"Vikings has been a landmark project from its inception. It is
one of the nation's first solar peaker plants, and today it is one
of the first utility-scale solar-plus-storage ITC and PTC
transferability transactions to close since the Inflation Reduction
Act passed in August 2022," stated
Kevin Smith, Arevon's
CEO. "Vikings is an important project in our portfolio,
representing Arevon's ongoing commitment to powering the clean
energy transition with renewable energy while using energy storage
to enable solar to meet peak electricity demand and increase grid
resilience."
Located in Imperial County,
California, the Vikings power plant features a unique
configuration of 157 MWDC of solar coupled with 150
MW/600 MWh of battery energy storage. Vikings is contracted to
provide resource adequacy and renewable energy to San Diego
Community Power, helping to support grid reliability beginning in
2024.
The project showcases key U.S. manufacturers, with PV module
supply from Tempe, Arizona-based
First Solar (NASDAQ: FSLR), along with solar trackers from
Nextracker (NASDAQ: NXT), whose headquarters are in
Fremont, California. Tesla
(NASDAQ: TSLA) is supplying the facility's utility-scale batteries,
which allow the solar energy generated to be directed to the grid
during peak demand, powering up to 50,000 homes. Construction of
the facility is well underway, with commercial operations scheduled
for the third quarter of 2024. San
Diego-headquartered SOLV Energy is performing the
construction activities.
The IRA's transferability tax credit provision allows for the
simple transfer of tax credits from project owners to profitable
taxpayers, according to the EPA's Green Power Markets Summary. In
June of 2023, the U.S. Treasury released guidance on the tax
credit transferability mechanisms established by last year's IRA.
This highly anticipated announcement provided proposed regulations
for credit transfers under Section 6418.
"ITC and PTC tax credit transferability is a major step forward
for the energy transition, post-IRA, and we are excited to be able
to leverage it on the Vikings financing structure," said
Daniel Murphy, Arevon's Director of
Project Finance. "This solar peaking project concept is a key
strategy for Arevon, and we are grateful to our financing parties
for their support on this groundbreaking financing using tax credit
transferability."
Stoel Rives represented Arevon as
legal counsel; Milbank LLP served as transfer counsel; and Winston
& Strawn LLP served as lender counsel.
About Arevon
Arevon Energy, Inc. is a leading renewable energy company,
supplying clean energy to utilities and corporations across
North America. Headquartered in
Scottsdale, Arizona, and
New York City, Arevon uses
innovative approaches and leading-edge technology to develop,
build, finance, own, and operate clean energy projects. Its
financial prowess and industry expertise come together to improve
the structure and performance of its platform of solar and energy
storage power plants. Arevon was named one of Arizona's Top Workplaces in 2022 and 2023. For
more information, please visit: www.arevonenergy.com.
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SOURCE Arevon