Recently, Vesper Energy declared the closing of $590 million in funding for the construction of the Texas based Hornet Solar Project. Vesper Energy owns, develops solar projects, as well as operates utility scale assets.
Boasting a capacity of 745MW, the Hornet Solar Project will be situated in Swisher County of Texas. The electricity generated by the plant will be enough to power up to 160,000 households every year.
Blattner Energy, an entity undertaking the project, is looking to sell its electricity to four big off takers. The sale is expected to be done through a power purchase agreement.
The Hornet Solar Project timelines
Construction work on the project began in the last quarter of 2023. The Hornet Solar Project is expected to commence operations as soon as the start of 2025.
According to Vesper Energy, the solar project will provide electricity to communities across the state. It will also offer grid stability and alleviate the volatility of costs in the ERCOT market, linked to the Oncor Electric transmission system. Bifacial solar modules will be used by the Hornet Solar Project, on a single axis tracker. This is the industry’s standard used for large utility scale solar power Projects countrywide.
In the coming ten years, according to the company, it will monetize more than $500 million of Production Tax Credit (TPC).
Closing on financing as well as a long-term purchase agreement for the PTCs on a massive initiative is complex. This is according to Robert Scheuermann, chief financial officer of Vesper Energy.
He said that they are pleased to make an investment in the Hornet Solar Project, along with other big lenders and also investors.
The project’s funding
The debt financing package, made up of $590 million, involves a construction to term loan as well as a letter of credit facility. Operating as the lead arrangers were the MUFG Bank Ltd., Santander Corporate & Investment Banking and Nord/LB. Bayern LB operated as a joint lead arranger, while the Associated Bank operated as a lender.
Up to $500 million in Inflation Reduction Act production tax credits are set to be monetized as well as leveraged by the facility of loaning through purchase commitment prepared by Advantage Capital. Vesper was also advised by CCA Capital on the sourcing and also on how to structure the PTC agreement.
Advantage Capital’s vice president, Michael Sponseller, said that the transaction shows the ability of Advantage Capital to structure creative solutions when it comes to financing for a dynamic and growing clean energy market.
Over the life of the Hornet Solar Project, it is projected that the facility will contribute to Swisher County, over $100 million in new tax revenue. This amount will be raised without increasing taxes.
Tulia Independent School District will receive $61.2 million of the projected tax benefits, $25 million to Swisher County. The Swisher County Memorial Hospital will receive $11.9 million of the benefits.
About Vesper Energy
With more than 10 GW of renewables delivered along with energy projects worldwide, Vesper Energy has its headquarters based in the Dallas area. It has more than 55 renewable projects in the pipeline. It also includes energy storage projects with over 17 GW of combined capacity.