Ashtrom Announces ~$270M Green Financing for ~400 MW Tierra Bonita Solar Project in Texas

Source: 10/2/2023, Location: North America

In parallel, Ashtrom Renewable Energy concluded a Tax Credit Transfer Agreement covering the sale of production tax credits (PTC) to a highly rated institutional entity for an estimated value of ~$300M over a ten-year period
Total investment in the Tierra Bonita project is estimated at ~$435M and it is expected to be operational by Q4 2024

Ashtrom Renewable Energy, a global independent power producer and renewable energy developer and subsidiary of Ashtrom Group, today announced the signing of a green financing totaling ~$270M with a group of five banks: BHI, the U.S operation of Bank Hapoalim Group, Bayerische Landesbank, ING Capital, Rabobank and Société Générale.

In addition, Ashtrom Renewable Energy signed a Tax Credit Transfer Agreement (TCTA) to sell the production tax credit (PTC) to be produced by the project over a ten-year period to a highly rated (Aa3 Moody's) U.S. institutional entity. The total value of the PTC is estimated at ~$300 million. The Tierra Bonita project is one of the very first solar projects in the U.S. to complete a Tax Credit Transfer Agreement for solar PTCs under the new Inflation Reduction Act (IRA), and complete financing under a project finance structure.

"The financial closing of the Tierra Bonita project marks a significant milestone for Ashtrom Renewable Energy, demonstrating confidence in our strong capabilities to execute the development, planning, financing and construction of our first large-scale solar project in the U.S., with a total investment of approximately $435 million," said Yitsik Mermelstein, CEO at Ashtrom Renewable Energy. "In addition, we have also entered into a pioneering agreement to sell the project tax credits to a leading U.S.-based institutional entity for an estimated value of $300 million. This follows our PPA agreement from last year to sell ~60% of the project’s electricity to the CPS Energy (Aa2 Moody's) the municipal utility of San Antonio for a 20-year term."

The Tierra Bonita project is located on a ~2,400 acres site in Pecos County, Texas, with a planned capacity of ~400MWdc (306 MWac). It is currently under construction, and commercial operation is expected by Q4 2024. The project is expected to have positive environmental impact, reducing CO2 emissions by over 500,000 tons per year. As a result, financing for the project was structured as a Green Loan in alignment with Green Loan Principles and with ING as the Green Loan Structuring Agent.

The Tierra Bonita project was developed by Ashtrom Renewable Energy and its local development partner, OnPeak Power, LLC, an industry leading privately held renewable energy company based in Austin, Texas. OnPeak specializes in renewable energy project development and asset optimization. Mortenson is the EPC contractor of the project.

Morgan Lewis and Marathon Capital advised Ashtrom Renewable Energy. Allen & Overy advised Stonehenge Capital.

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