China Development Bank provides a $15.6 million USD loan for the Engineering, Procurement, and Construction (EPC) Financing for the 9.769 MW ImClone Solar Power Project (Linked to Record ID#105486 and #105569)

Project narrative

On December 30, 2011, the Jiangxi Branch of China Development Bank Corporation (CDB) entered into a $15,600,000 USD and a RMB 77,850,000 facility agreement with SPI Solar New Jersey, Inc. — a New Jersey-incorporated special purpose vehicle (SPV) and wholly-owned subsidiary of Solar Power, Inc. (SPI), a California-incorporated U.S. solar power company listed on the Main Board of the New York Stock Exchange (NYSE) and majority-owned by Cayman Islands-incorporated LDK Solar Co., Ltd., a Jiangxi, China-based manufacturer of photovoltaic solar panels used in the project also listed on the NYSE — for the Engineering, Procurement, and Construction (EPC) Financing for the 9.769 MW ImClone Solar Power Project. This facility, governed by English law, carried a drawdown period of 12 months, a maturity period of 24 months (two years) from first utilization, a variable interest rate of LIBOR plus a margin of 5.10% for the $15.6 million USD portion and "the standard RMB interest rate" for the RMB 77.85 million portion, a repayment schedule with interest payable every six months. Record ID#105485 captures the $15.6 million USD facility. Record ID#105486 captures the RMB 77.85 million facility. This loan was secured by (i.e. collateralized against) an assignment of right, title, and interest to the collection accounts (account numbers #12020290 and 12020281), the EPC contracts, all supporting obligations, and proceeds and products, as pledged by Solar Power, Inc. per a security agreement dated December 30, 2011 governed by the State of New York. The proceeds were used by the borrower to fund the construction cost of the EPC contract dated August 8, 2011 between SPI as contractor and KDC Solar Branchburg LLC — a New Jersey-incorporated SPV and project company — as owner for the electricity grid-connected photovoltaic, solar power generation facilities with a specified installed capacity of approximately 9.769 MW known as the ImClone Solar Power Project located at 50 ImClone Drive, Branchburg, New Jersey 08876. The solar system consisted of 40,180 PV panels and 16 Advanced Energy Industries 500-kW inverters ground-mounted across 43 acres of land and was capable of generating approximately 12.9 million kilowatt hours of electricity annually, equivalent to 1,200 homes providing 45% of the power needed for Eli Lilly and Company’s ImClone Systems biopharmaceutical operations in Branchburg, reducing its carbon footprint. This was the largest solar system for a non-utility company on the East Coat and one of the largest solar panel installations for the pharmaceutical industry globally. KDC Solar LLC was the developer, owner, and operator of the system. SPI served as EPC contractor together with The Whiting-Turner Contracting Company, with SPI in charge of solar panel procurement and oversight and Whiting-Turner serving as general contractor. LDK Solar provided modules for the project. SPI agreed to advance to KDC predevelopment and site acquisition costs related to the Imclone EPC agreement between KDC and the SPI and recorded the amount as notes receivable. The terms of the EPC agreement require repayment of the advance upon final completion of the project. The project was initially expected to be completed in the first half of 2013. Construction's commencement however was delayed for one year due to issues with SPI Solar and the solar industry. In the first quarter of 2013, $13.0 million USD of the CDB lending were drawn down and sent to KDC Solar for the project; it was expected to resume in the second quarter of 2013. Structuring third-party project financing and project delays furthered SPI's losses. Construction began in the second quarter of 2013. LDK Solar, the parent of SPI Solar, had its own financial issues that led SPI to arrange advance payments to the module factory before order acceptance, production, and shipment. On December 27, 2013, the Jiangxi Branch of CDB entered into a $22,400,000 USD term loan facility agreement with KDC Solar Credit LS LLC — a New Jersey-incorporated affiliate of KDC Solar LLC, a Delaware-incorporated privately owned, developer, builder, and owner of solar projects headquartered in Bedminster, New Jersey — allowing KDC Solar to pay SPI Solar for the majority of funds owed on the ImClone project for the predevelopment and site acquisition costs, removing $28.5 million USD of construction loan facility from SPI's balance sheet and allowing it to fund other solar projects, as well as to repay the CDB loans to SPI. Record ID#105569 captures the CDB loan to KDC Solar. Commercial operations commenced on June 4, 2014.