Lonoke County judge approves PILOT agreement for $600 million solar development

A $600 million, 300-megawatt solar project in Lonoke and Pulaski counties is one step closer to reality.

On Aug. 15, county records show, Lonoke County Judge Doug Erwin approved an up to $700 million taxable industrial development revenue bond that will facilitate a payment in lieu of taxes agreement with the solar project’s developer. That agreement is set to generate more than $55 million for the two counties over the next 50 years.

The agreement comes as the mayor of Keo has publicly called on the developer to enter into a community benefits agreement with the city, seeking monetary support for infrastructure and community-building projects in Keo.

The proposed project, called the Downstream Solar Energy Center, will be just north of Keo, between Arkansas 161 and U.S. 165. It will take up around 6,000 acres in both counties, about 90% of which will be in Lonoke County. The wattage would be enough to power around 69,000 homes, according to the company.

Chicago-based Invenergy, the largest privately-held developer, owner and operator of alternative energy developments in the country is developing the project. It’s set to start construction in 2026, which will generate 300 jobs. It will employ three full-time staff after completion in 2028.

The payment in lieu of taxes, or PILOT, agreement would generate a total of $55.2 million in revenue for the Pulaski County General Fund, the Pulaski County Special School District and the England School District over a period of 50 years. It will also generate $7.5 million for Lonoke County, according to a report from Talk Business & Politics.

The PILOT program would come with a tax abatement of 65% over a period of 30 years. The majority of the revenue generated would come during that 30 year period, including $640,000 for the Pulaski County General Fund, $15 million for the Pulaski County Special School District and $25 million for the England School District.

The remaining $14.6 million of the $55.2 million would be generated during the 20-year post-PILOT tax period.

Land for the project would be owned by the respective counties and leased to Downstream Solar Energy LLC, a Delaware-registered subsidiary of Invenergy. Lonoke County entered into the August 15 agreement with Downstream Solar.

Eve Shanahan, a senior analyst for renewable energy at the company, said at a public meeting earlier this month that the company has so far entered into 12 voluntary lease agreements with landowners.

“I don’t feel like I have the right to tell a landowner what he can do with his land, and I think it is a win-win for everybody,” Erwin said in an interview.

The company is now waiting for approval from Pulaski County Judge Barry Hyde, who said earlier this month that he would decide on the PILOT agreement in the next 30 days. Hyde could not be reached for comment by deadline.

Solar projects have come with similar agreements in the past. Cross County approved a $250 million bond issuance in 2022 to facilitate a PILOT agreement with the company behind the Cherry Valley Solar development.

According to Nicole Soulsby, an attorney with the Rose Law Firm, the firm representing the company, the 65% abatement is the “standard” across the state. A proposed data center at the Port of Little Rock is set to receive a 65% tax abatement for 30 years.

The project still faces community concerns.

In a news release, Keo Mayor Stephanie White asked Invenergy to finalize a Community Benefits Agreement with the City of Keo, which she hopes will provide funds for broadband infrastructure and the re-development of a city-owned building into a community and welcome center.

“What I’m aiming at is an ability to call this a win for the entire community of Keo,” she said. “We’re very happy for the landowners who were able to secure the agreements with Invenergy, but we’re looking for an investment in the community.”

White said she wants the agreement partially because the project’s location means that the city is limited in its ability to expand northward.

When asked whether the city had plans for expansion prior to the solar project’s announcement, White said it did not. Keo had a population of 207 in 2020, according to the U.S. Census Bureau, down from a peak of 325 residents in 1920.

White declined to publicly disclose the exact amount the city seeks, but said it was less than 1% of the total project cost.

Invenergy has invested in Keo before, having sponsored the city’s pecan festival four times.

In an email statement, Shanahan also announced that it entered into a community benefits agreement with Keo Collective, a local nonprofit, to invest $100,000 in its programs.

“We take engagement with our host communities seriously and have made several offers for a Community Benefits Agreement with the City of Keo that fulfill many of Mayor White’s requests to invest in Keo. We thank Judge Erwin for approving the PILOT agreement and hope Mayor White joins us in an agreement that allows Keo to benefit as the project moves forward,” Shanahan said in a statement.

Invenergy has developed projects across the country, including two official projects in Arkansas: the 100-megawatt Walnut Bend facility in Lee County and the 450-megawatt Chalk Bluff Solar Facility in St. Francis County. Walnut Bend entered operations last year and Chalk Bluff is planned to begin operations in 2027.

Entergy Arkansas Inc. acquired Walnut Bend in September 2024. Entergy also owns the state’s largest operational solar project, the 313-megawatt Driver Solar Project just outside of Osceola.

Invenergy has entered into two agreements with tech giant Meta over the past two years to provide energy for the company’s data center operations. According to news releases from the company, the Chalk Bluff facility, along with an as-yet-unannounced 155-megawatt Decoy Solar Energy Center, will provide some of that power.

Shanahan said Invenergy is still “working on contracting with an off-taker” for the Downstream Solar project. Entergy is currently reviewing the proposals it received from its 2025 bid solicitation for renewable energy projects, according to a company spokesperson.

Lucas Dufalla is a Report for America Corps member. Financial support for this coverage came from the Community Journalism Project.