Arevon Energy, a prominent developer, owner and operator in the renewable energy sector has secured $299 million in total debt financing commitments for its Ratts 1 Solar and Heirloom Solar projects in Indiana.
Arevon Adds 264 MW Solar Capacity in Pike County
The projects, which contribute to Arevon's expanding portfolio in the Midwest and the Midcontinent Independent System Operator (MISO) region will bring an additional 264 megawatts (MWdc) of clean energy capacity to Pike County, Indiana.
Arevon’s Ratts 1 and Heirloom Solar projects in Pike County, Indiana, will add 264 MWdc of clean energy capacity, with full operation expected by Q3 2025
Construction is in progress at Ratts 1 Solar and Heirloom Solar, with both projects expected to be fully operational by Q3 2025. Ratts 1 Solar, with a capacity of 192 MWdc will run under a power purchase agreement (PPA) with the Indiana Municipal Power Agency. The 73-MWdc Heirloom project is supported by Meta Platforms Inc., which has acquired the environmental attributes generated by the solar farm.
Arevon Secures Multiple Large Solar Financings
Alongside the Ratts 1 and Heirloom Solar Projects, Arevon has secured several other financings over the past year. These include a $352 million deal for the Posey Solar Project, a $529 million financing package for the Vikings Solar-plus-Storage Project, a $350 million preferred equity, debt and ITC transfer financing for the Condor Energy Storage Project, a $1.1 billion tax equity commitment and debt financing for the Eland 2 Solar-plus-Storage Project which encompasses a construction-to-term loan, a tax equity bridge loan and letter of credit facilities.
"The Ratts 1 and Heirloom Solar Projects fortify Arevon's reputation as a leader in spearheading innovative financial agreements and further underscore the company's ability to successfully close project financing and drive projects into construction. I am proud of our team's ability to manage risks appropriately, forge creative financial solutions, and maximize the potential of the IRA to create a more sustainable energy future." said Kevin Smith, Chief Executive Officer at Arevon.
Arevon's First IRA-Leveraged Financing
This financing package includes several unique features and marks Arevon's first deal structured with an uncommitted tax equity and a tax credit transfer bridge takeout. The transaction utilized the flexibility offered by the Inflation Reduction Act's (IRA) tax credit transfer provisions, instead of the traditional construction-to-term loan arrangements with committed tax equity at financial close.
This approach allowed for greater flexibility in capital structure and the advantage of realizing future tax credit transfers closer to the start of commercial operations.
Crédit Agricole, Commerzbank, Bank of America and Lloyds Bank acted as Coordinating Lead Arrangers collectively providing a $119 million construction-to-term loan, a $159 million tax equity and tax credit bridge loan and a $21 million letter of credit facility. Crédit Agricole also served as the Administrative Agent, Green Loan Coordinator and Interest Rate Swap Coordinator. BNY Mellon was the Collateral and Depositary Agent. Latham & Watkins served as Sponsor Counsel and Milbank acted as Lender Counsel.
"While the IRA's tax credit transfer mechanism offers a broad range of debt and equity options, pioneering new financing structures present unique challenges. This financing package is cutting-edge and complex, as well as a major milestone, as it is Arevon's first deal structured with an uncommitted tax equity and tax credit transfer bridge takeout. We are grateful to our financing partners for working with us to close this advanced transaction." said Denise Tait, Chief Investment Officer at Arevon.