Alterra Power Corp. and Inovateus Solar LLC have announced the closing of a $19.9 million construction loan facility for the Spartan solar project, an 11 MW solar project located on the Michigan State University campus in East Lansing, Mich.
The loan facility is supplied by 1st Source Bank, a subsidiary of 1st Source Corp., and consists of a $19.8 million construction loan plus a $500,000 letter of credit. Concurrently with the construction loan, 1st Source will provide a $9.7 million tax equity investment commitment and a $10.2 million term loan commitment, both of which will be used to retire the construction loan facility upon achievement of commercial operations (each subject to typical conditions precedent). The term loan will have a balloon payment based on a six-year maturity and 20-year amortization.
Separately, Alterra completed a partnership agreement with Inovateus, under which Alterra will manage the project and hold a majority interest of at least 85% (final partnership allocations are subject to final project economics and other factors).
Alterra expects the Spartan project (currently under construction) to achieve commercial operations in December. Spartan is contracted under a 25-year power purchase agreement with the Michigan State University’s board of trustees for 100% of plant output. Construction is being managed by Inovateus, which will also provide operations and maintenance services.
“We’re pleased to complete this second project with our solar partner Inovateus and to complete another financing with 1st Source,” says Jon Schintler, vice president of project finance and development at Alterra. “We look forward to serving Michigan State University for many years and hopefully expanding our Midwest solar operations.”
“We are very proud of our entire team on the development of the Spartan project. A special thank you to Michigan State University, along with our partners 1st Source Bank and Alterra for joining us in building a brilliant tomorrow,” says TJ Kanczuzewski, president of Inovateus.