Government officials and renewable energy developer VIElectron heralded the long-awaited interconnection between the Estate Petronella solar farm and the V.I. Water and Power Authority’s electric grid as a milestone in the U.S. Virgin Islands’ push to add reliability and sustainability to the territory’s power infrastructure during a ribbon-cutting in December. A second solar park in Estate Hogensborg was interconnected with WAPA that same month, and there are plans for solar developments on St. Thomas and, eventually, St. John.
According to a lawsuit VIElectron filed in V.I. Superior Court this week, the territory’s solar ambitions almost died on the vine.
VIElectron was in “a precarious financial situation” in Fall 2024, according to their complaint. Ownership of the solar farms had been transferred to the nonprofit V.I. Renewable and Affordable Power Company in exchange for $216.6 million in promissory notes, and the company needed to repay loans to Savent Financial, a financing solutions company that had solicited third-party loan investment from Texas-based firm Highcrest.
According to VIElectron, the lenders threatened to derail the company’s sale of solar investment tax credits — a sale VIElectron needed in order to repay loans from Savent — at the 11th hour when Highcrest shoehorned “profit-sharing” provisions into VIElectron’s loan agreement. Those provisions would require the company to pay Highcrest half a million dollars and 50 percent of the profit from both solar farm projects. Further, the new agreement would require VIElectron to effectively cede control of the projects to Highcrest.
Without the sale, VIElectron and VIRAPC risked defaulting on their loans and foreclosing on the solar projects.
“Highcrest made it clear that it would not consent to the commercially reasonable and acceptable terms of the tax credit sale previously negotiated and agreed to by the stakeholders — unless VIE agreed and signed the surprise ‘profit-sharing’ letter agreements,” according to the complaint. “Highcrest was holding a proverbial financial gun to VIE’s head.”
VIElectron gave in.
“Faced with an impossible choice of losing millions of dollars in capital investments literally weeks before the Petronella Solar Project and the Hogensborg Solar Project became operational, or capitulating to Highcrest’s ransom, VIE was forced to consent to Highcrest’s demands in an attempt to salvage what it could of its years of risk, time, capital, and investment,” according to the complaint.
The company is asking the court to force Highcrest to repay the half million dollars and void the profit-sharing agreement and to pay attorney’s fees and punitive damages.
