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Financing Finalized, Construction Begins on $150M Solar Field Near Sheridan

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A Texas clean energy company that announced plans for a Grant County solar array in October has obtained $123 million in financing. It has also begun construction on the 100-megawatt, thousand-acre array.

Treaty Oak Clean Energy of Austin is building the $150 million solar facility, the Redfield Solar Project, east of Sheridan.

The financing deal, which closed last month, includes a construction-to-term loan, a tax credit bridge loan and a letter of credit facility, the company said in its announcement Tuesday.

The consortium of lenders involved in the deal included Canadian Imperial Bank of Commerce in Toronto, Credit Agricole Corporate and Investment Bank of Paris and ING Capital LLC of New York.

‘Growth and Sustainability’

Ines Serrano, CIBC’s managing director and head of U.S. renewables, said in a statement the bank was “thrilled” to play a leading role in financing the project.  “This is another demonstration of CIBC’s commitment to helping our clients achieve their growth and sustainability ambitions,” she said.

Treaty Oak CEO Christopher Elrod, in a news release, called the financing agreement a “significant milestone in our commitment to driving economic development and energy independence in Arkansas.” He said the project, to be built over 18 months, will bring jobs and “dramatically expand” Grant County’s tax base. He thanked the project’s lenders, suppliers and vendors.

Christopher Bell, director of the energy and infrastructure group and Credit Agricole CIB, praised the project for providing “needed energy and capacity to the MISO South region.” MISO is the Midcontinent Independent System Operator, the power mid-American power grid organization with headquarters in Little Rock and Carmel, Indiana. Bell said he looked forward to further supporting Treaty Oak “as they develop their project pipeline.”

First to Break Ground

Treaty Oak is a portfolio company of Macquarie Asset Management of Sydney, Australia. It expects the Grant County project to be the first of many. It has a virtual power purchase agreement in place with a big-name technology company, Treaty Oak Director of Government Affairs Marshall Coover told Arkansas Business late last year. He wasn’t at liberty to disclose the power buyer, nor did the Jan. 21 announcement.

The project will create about 200 construction jobs, the company said. The electricity it creates will be enough to power 18,000 homes.

An interconnection via Entergy Arkansas will put the electricity on the MISO power grid. From there it will go onto the wholesale power market, Coover said. The technology company will reap the value of that power, along with associated renewable energy credits, through the purchase agreement.

The array’s 100-megawatt capacity is enough to power about 20,000 homes, Coover said. “We’ve got a great capital partner and a winning formula,” he said. “That formula is driven by our mantra of value over volume.” The company carefully screens potential projects and keeps their number low “to focus on de-risking and really investing time in community engagement,” he said. “There’s a lot of misinformation about solar developments and communities, understandably, are starting to ask questions.”

Treaty Oak worked closely with Grant County Judge Randy Pruitt, municipal officials and even school systems, Coover said. 

The project will employ state-of-the-art technology, including  bifacial panels that create power from direct and reflected sunlight.

Site Requirements

The company looks for sites that include at least 1,000 acres of contiguous, flat and dry land, Coover said. The area has to be sunny, of course, and Treaty Oak favors timber land over agricultural acreage. The Grant County location is on timberland that the seller cleared. A land agent helped facilitate the deal.

The Grant County site had another advantage: guaranteed transmission capacity.

“For this Arkansas project the reason we know the transmission line has [sufficient] capacity is there’s a coal plant not too far away that’s retiring, which is going to decrease the burden on this transmission line.”

Entergy Arkansas is retiring its White Bluff power plant in Redfield in 2018.

Tanja van der Woude, ING Americas’ managing director, energy, expressed pride in its financing leadership for Treaty Oak. “Their long-term perspective and focus on putting communities at the heart of energy transition is a model we believe in,” she said in the release.

Kirkland and Ellis provided legal guidance for Treaty Oak in the financing agreement. Paul Hastings LLP represented the lead credit arrangers.

Treaty Oak expects commercial operations to begin in the first half of 2026. Local and state tax revenue from the facility will exceed $10 million over the life of the project.

 

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