Guerra asks if Willacy County can have a stake in Soluna’s $80 million data center project

RAYMONDVILLE, Texas – Willacy County Judge Aurelio ‘Keter’ Guerra would like his county to have a financial stake in Project Kati, the 166-megawatt data center project Soluna Holdings, Inc., is building in his county.

The $80 million data center will be built on the site of Las Majadas Wind Farm, situated east of Sebastian and Lyford.

“Can we invest in this type of project?” Guerra asked, after Soluna’s CFO, John Tunison, had made a presentation about Project Kati at Willacy County Commissioners Court.

“Since you’re in the forefront of technology… I think this is a good time… without delaying the project; I don’t want to be somebody throwing in the wrench… but, going forward, I wonder if that is possible for the county to be part of these innovation ideas?” Guerra said. 

Tunison responded: 

“So, I think, if I understand right, what you’re saying is either directly or (indirectly) investing into the project on an equity basis, essentially. So, one of the challenges, just to maybe shed some light on how we sort of bring these projects to fruition, and how we finance them, is typically with a range of project financing partners.

“The challenge that I see is closing those financings. It’s not a hard ‘no,’ but it’s complicated and, in our experience, bringing other financing sources into the capital stack presents challenges, because the nature of these investors typically is, they underwrite and are structured to essentially take all of the risk and not necessarily have other financing parties, whether that be a county or another in the capital stack.”

Tunison continued: 

“I don’t know that we’ve asked ourselves and some of our financing partners that question directly, and so I am happy to do that. But to manage expectation… we have asked about other financial investors and minority partners essentially joining, and those answers have been pretty uniformly been ‘no.’ But, I think it’s an interesting idea, and I am happy to take that back and see if there’s something to be done. It’s an interesting idea. I understand why you’re asking.”

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