Innergex Renewable Energy Inc. announced the closing of a construction financing, tax equity commitment, as well as a seven-year term loan facility for the 200 MW Hillcrest solar photovoltaic project located in Brown County, Ohio. In aggregate, the $191.8 million financing was led by CIT's Power and Energy group and includes MUFG and Mizuho, as well as Wells Fargo as the tax equity investor. The project was acquired in October 2018 from a joint venture between Open Road Renewables LLC and MAP Energy LLC, the initial developers of the Hillcrest project.
"Securing Hillcrest's financing is an important step forward, and we are very pleased with the terms of the agreement we have reached," said Michel Letellier, president and chief executive officer of Innergex. "This agreement confirms Innergex's strong ability to raise significant funds even during the harshest economic environment seen in decades. We appreciate the support and trust demonstrated by our lenders and our tax equity partner throughout this process. The construction of Hillcrest began earlier this year and is progressing well. We have contingency plans and measures in place to address any problems that may arise due to the current pandemic, and unless a decree is issued to halt construction, Hillcrest should come online by the end of the year."
The total construction costs are estimated at $279.5 million and will be partly financed through a $82.0 million construction term loan and a $109.8 million tax equity bridge loan provided by a lender group composed of CIT Group, MUFG and Mizuho. Innergex will fund the remaining $87.7 million equity commitment. At commercial operation, Wells Fargo's Renewable Energy & Environmental Finance group will provide the tax equity investment used to repay the tax equity bridge loan.
"We are very pleased to again support Innergex as it continues to expand its portfolio of renewable energy projects," said Mike Lorusso, managing director and group head of CIT's Power and Energy business. "Innergex is making major strides in advancing the growth of renewable power and CIT is proud to play a role in facilitating that growth."
The project should receive a federal Investment Tax Credit (ITC) sized to approximately 30 percent of the project's eligible value. Hillcrest is expected to produce a gross estimated long-term average of 413.3 GWh and a $10.7 million projected adjusted EBITDA on average for the first five years of operation.
A power purchase agreement was signed last November with an investment grade rated U.S. corporation for Hillcrest's electricity production, which will be effective when the facility reaches its commercial operation. Innergex is required not to disclose the terms and conditions of the agreement until the other party has made public the information.