Inovateus Solar and Alterra Power Corp. are pleased to announce the closing of a U.S. $8.9 million construction and term loan facility for an approximately 7MWDC solar project located in Kokomo, Indiana.
The facility is supplied by 1st Source Bank, a subsidiary of 1st Source Corporation ("1st Source") and consists of a $8.9 million construction loan plus a $150,000 letter of credit. Concurrently with the construction loan closing, 1st Source is providing a $4 million tax equity investment commitment and a $5 million term loan takeout that will be used to repay the construction loan upon commencement of commercial operations. The term loan will have a balloon payment based on a 10-year maturity and 18-year amortization. The loan proceeds will be used to pay for the portion of remaining project costs not paid by the tax equity investment.
Separately, Alterra completed its previously announced partnership agreement with Inovateus and acquired a 75% interest in this 7MWDC Kokomo solar project. The final partnership allocations are subject to change under certain circumstances prior to term loan conversion.
The Kokomo solar project is currently under construction in Kokomo, Indiana, and is expected to begin commercial operations in December 2016. The project is contracted under a 20-year power purchase agreement with a local Indiana utility for 100% of plant output. Construction is being managed by Inovateus, which will also provide operations and maintenance services under a long-term contract. Alterra will manage and administer the project. Once completed in December 2016, this Kokomo solar project will provide 7MWDC of clean power capacity and economic benefit to the Indiana community.
Another benefit from the project is that solar panels will be installed on a remediated superfund parcel of city-owned land, making use of Kokomo city property that, until now, had been underutilized by the community.
"Closing the financing for the Kokomo solar project marks another step toward bringing more renewable energy to Indiana and the greater Midwest region," said TJ Kanczuzewski, President of Inovateus Solar. "These finance partnerships are key to continuing the global transition to clean, renewable energies like solar. It also makes use of underutilized land, such as this superfund site. We look forward to doing more projects with Alterra and creating more local clean energy jobs in Michigan and all over the Midwest."
Alterra and Inovateus are actively developing a second solar project, a 13MWDC site located in Michigan, which is expected to enter construction in 2017. The Michigan solar project is also contracted under a 25-year, investment-grade power purchase agreement.
"We're pleased to complete the Kokomo financing on commercially favorable terms with 1st Source and Inovateus," said Jon Schintler, VP of Project Finance at Alterra, "and we look forward to building the Michigan solar project next year. We hope to further these relationships as we develop and build further projects together."