Arevon Vitality has introduced it has closed financing on the Vikings photo voltaic + storage challenge with a mix of debt financing and tax credit score switch. Arevon secured a dedication with J.P. Morgan to buy $191 million of funding tax credit and manufacturing tax credit, among the many nation’s first transactions introduced to this point that leverage the Inflation Discount Act’s transferability provision. The extra $338 million debt facility was financed with MUFG, BNP Paribas, Sumitomo Mitsui Banking Company and First Residents Financial institution, which acted as Coordinating Lead Arrangers. Nationwide Financial institution of Canada additionally participated as a lender.
“Vikings has been a landmark challenge from its inception. It is likely one of the nation’s first photo voltaic peaker crops, and at this time it is likely one of the first utility-scale photo voltaic + storage ITC and PTC transferability transactions to shut because the Inflation Discount Act handed in August 2022,” stated Kevin Smith, Arevon’s CEO. “Vikings is a vital challenge in our portfolio, representing Arevon’s ongoing dedication to powering the clear vitality transition with renewable vitality whereas utilizing vitality storage to allow photo voltaic to satisfy peak electrical energy demand and enhance grid resilience.”
Situated in Imperial County, California, the Vikings energy plant contains a 157 MWDC of photo voltaic coupled with 150 MW/600 MWh of battery vitality storage. Vikings is contracted to supply useful resource adequacy and renewable vitality to San Diego Neighborhood Energy, serving to to assist grid reliability starting in 2024.
The challenge showcases key U.S. producers, with PV module provide from Tempe, Arizona-based First Photo voltaic, together with photo voltaic trackers from Nextracker. Tesla is supplying the power’s utility-scale batteries, which permit the photo voltaic vitality generated to be directed to the grid throughout peak demand, powering as much as 50,000 properties. Building of the power is properly underway, with industrial operations scheduled for the third quarter of 2024. San Diego-headquartered SOLV Vitality is performing the development actions and began the construct in February.
The IRA’s transferability tax credit score provision permits for the easy switch of tax credit from challenge house owners to worthwhile taxpayers, based on the EPA’s Inexperienced Energy Markets Abstract. In June of 2023, the U.S. Treasury launched steerage on the tax credit score transferability mechanisms established by final yr’s IRA. This extremely anticipated announcement offered proposed rules for credit score transfers underneath Part 6418.
“ITC and PTC tax credit score transferability is a serious step ahead for the vitality transition, post-IRA, and we’re excited to have the ability to leverage it on the Vikings financing construction,” stated Daniel Murphy, Arevon’s director of challenge finance. “This photo voltaic peaking challenge idea is a key technique for Arevon, and we’re grateful to our financing events for his or her assist on this groundbreaking financing utilizing tax credit score transferability.”
Stoel Rives represented Arevon as authorized counsel; Milbank LLP served as switch counsel; and Winston & Strawn LLP served as lender counsel.
Information merchandise from Arevon
