The loan consists of $8.9 million, plus a $150,000 letter of credit. 1st source is also providing a $4 million tax equity investment and a $5 million term loan takeout. This will be used to pay back the construction loan once the project is commercially operational.
The Kokomo project is currently in construction and expected to begin operations in December 2016. Duke Energy Indiana will take 100% of the plant's output, under an already signed 20-year PPA.
Closing the financing marks another step toward bringing more renewable energy to Indiana and the greater Midwest region, said TJ Kancuzewski, President of Inovateus. We look forward to operating and maintaining the project.
The partnership between Alterra and Inovateus was announced earlier in the year, with Alterra acquiring an 80% stake in 2 projects located in the Midwest region. Alterra will manage and administer the project, with Inovateus managing the construction phase and providing long term operations and maintenance support.
The two companies are also expected to begin construction on a second project, a 13 MW site located in Michigan, in 2017. Were pleased to complete the Kokomo financing on favorable terms with 1st Source and Inovateus stated Alterra's VP of Project Finance, Jon Schinctler. We look forward to advancing these relationships as we develop and build further projects together."