Arevon Energy closes $529m financing for Californian solar-storage project

US-headquartered Arevon Energy has closed a $529 million financing for the Vikings solar-plus-storage project in California 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”, a statement said. 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.

Located in Imperial County, California, the Vikings power plant features a 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.

PV modules for the project were supplied by First Solar, along with solar trackers provided by Nextracker. Tesla is supplying the facility’s utility-scale batteries, which will power up to 50,000 homes. Construction of the facility is “well underway”, with commercial operations scheduled for the third quarter of 2024, according to a statement. San Diego-headquartered SOLV Energy is handling construction activities.

“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,” said 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.”

Stoel Rives represented Arevon as legal counsel,  Milbank LLP served as transfer counsel, and Winston & Strawn LLP served as lender counsel.