Arevon earns $299 million financing package for 2 solar projects in Indiana
Arevon Energy Inc. has closed on $299 million in aggregate debt financing commitments for the Ratts 1 and Heirloom solar projects in Pike County, Indiana. The two projects will add 264 MWdc of renewable energy capacity to the company’s growing portfolio in the Midwest and Midcontinent Independent System Operator (MISO) territory.
This financing package has several unique attributes and is Arevon’s first deal structured with an uncommitted tax equity and tax credit transfer bridge takeout. The transaction leveraged the flexibility provided by the Inflation Reduction Act’s (IRA) tax credit transfer provisions, rather than the more traditional construction-to-term loan facilities with committed tax equity at financial close. This contract provided enhanced capital structure flexibility and the benefits of realizing future tax credit transfers closer to commercial operation.
Crédit Agricole, Commerzbank, Bank of America, and Lloyds Bank were each Coordinating Lead Arrangers, and combined, provided 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 served as the 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,” said Denise Tait, chief investment officer at Arevon. “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.”
Construction is underway at Ratts 1 Solar and Heirloom Solar, and the projects are targeted to be fully operational by Q3 2025. Ratts 1 Solar is under a long-term power purchase agreement with Indiana Municipal Power Agency, and Meta is the offtaker for Heirloom Solar.
In addition to the Ratts 1 and Heirloom projects, Arevon has announced other financings over the past year including a $352 million deal for its Posey Solar Project, a $529 million financing package for its Vikings Solar-plus-Storage Project, a $350 million preferred equity, debt, and ITC transfer financing for its Condor Energy Storage Project, and a $1.1 billion tax equity commitment and debt financing including a construction-to-term loan, a tax equity bridge loan, and letter of credit facilities for its Eland 2 Solar-plus-Storage Project.
“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,” Kevin Smith, Chief Executive Officer at Arevon said. “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.”
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