Project finance

FuelCell Energy secures $20m debt financing for Naval Submarine Base

Lenders on the financing include Liberty Bank and Amalgamated Bank.

August 28, 2023

FuelCell Energy, Inc. has closed on a project debt financing transaction with Liberty Bank and Amalgamated Bank as senior lenders and the Connecticut Green Bank as subordinated lender for its Connecticut Municipal Electric Energy Cooperative (CMEEC) fuel cell microgrid-ready project at the Naval Submarine Base New London, located in Groton, Connecticut (Groton Project).

Liberty Bank and Amalgamated Bank’s senior commitment totals $12m with a seven-year term and Connecticut Green Bank’s commitment totals $8m with a 20-year term, according to a news release.

According to SEC filings, the portion of the loan provided by Liberty will accrue at 6.75%, while the piece from Amalgamated Lender will accrue interest at 6.07% during all times at which a “Carbon Offset Event” is not continuing and 7.32% at all times at which a “Carbon Offset Event” has occurred and is continuing.

Michael Bishop, EVP and CFO of FuelCell Energy, said, “We are thrilled to enter into this long-term financing solution with this banking group. With its recurring revenue and cash flow profile, this fuel cell project allows for the efficient and cost-effective financing of our Company. In addition, we believe this financing further highlights financial institutions’ confidence in the demonstrated long-term performance of our globally deployed power platforms. Lastly, the long-term nature of the loan commitments allows the Company to confidently redeploy that capital in support of our growth initiatives.”

“The Connecticut Green Bank is proud to be part of the Groton Project. This strategically important project and our continued partnership with FuelCell Energy, Amalgamated Bank, and Liberty Bank exemplify how the green bank model works to leverage public dollars to attract multiples of local- and national-level private investment into clean energy infrastructure,” said Bert Hunter, Executive Vice President and Chief Investment Officer of the Connecticut Green Bank. “This also highlights the environmental, economic, and strategic value of distributed base load fuel cells, capable of operating as a microgrid, as a key to grid resilience, reliability, and energy security, especially for our nation’s military defense.”

“Liberty Bank is proud to support FuelCell Energy, Inc., a leader in the green energy industry, with project financing for the Groton Project to provide grid resilience for the local community and our nation’s military. Liberty Bank is committed to clean energy solutions partnering with The Connecticut Green Bank, who is a testament to the power of collective action in addressing the urgent challenge of providing sustainable energy sources to Connecticut,” said Daniel Longo, First Vice President of Liberty Bank.

William Peterson, SVP Senior Lending Officer & Director of Climate Lending of Amalgamated Bank, commented, “Our team’s significant experience in sustainable lending uniquely positioned Amalgamated to partner with Liberty Bank and the Connecticut Green Bank to underwrite FuelCell Energy’s project at the Naval Submarine Base as it further develops its power supply through sustainable energy. Sustainable lending is a critical and growing source of financing as the United States strives to achieve net-zero emissions across federal operations by 2050. Amalgamated’s team of recognized thought leaders and sustainable lending experts are excited by the opportunity to help combat climate change as we work to underwrite sustainable solutions and emerging technologies much like FuelCell Energy’s project with the U.S. Navy.”

Bishop concluded, “We believe that the commitment from these respected financial institutions demonstrate the financeability of the solutions FuelCell Energy is offering to customers like CMEEC, that are helping them achieve their decarbonization, resiliency and clean energy goals.”

Proceeds of this financing have been (i) redeployed to FuelCell Energy (ii) used to retire a $3m corporate credit facility with Connecticut Green Bank (iii) used to fund project reserves and (iv) pay transaction fees.

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Project finance, Project news

Macquarie Commodities supporting Mexico low-carbon methanol project

The project is expected to produce approximately 300,000 MT of green methanol from captured carbon and green hydrogen and 1.8 million MT of blue methanol per year from natural gas with carbon capture.

Transition Industries LLC has entered into a Master Services and Marketing Agreement with Macquarie Commodities Trading, an affiliate of Macquarie Group’s Commodities and Global Markets business, for its Pacifico Mexinol project, a 6,145 metric tons (MT) per day methanol production facility near Topolobampo, Sinaloa, Mexico, according to a news release.

When it commences operations, Pacifico Mexinol is expected to be one of the largest single low carbon chemicals facilities in the world – producing approximately 300,000 MT of green methanol from captured carbon and green hydrogen and 1.8 million MT of blue methanol per year from natural gas with carbon capture.

Under the terms of the MSMA, Macquarie is responsible for marketing all the production from Pacifico Mexinol to customers on a global basis in accordance with methanol offtake agreements, the provisioning of financial hedging services as required by the Project, and supporting the Project in commodity planning and contracting for all required feedstock. The MSMA has a term of 15 years from the Commercial Operations Date of the Project.

The International Finance Corporation, a member of the World Bank Group, is participating in the co-development of this global-scale low carbon methanol plant. IFC would act as project co-developer with Transition Industries LLC, and as the co-lead mandated arranger alongside Kreditanstalt fur Wiederaufbau IPEX. The MSMA and financing for Pacifico Mexinol were announced at a formal signing ceremony for the Joint Project Development Agreement in Dubai, UAE, alongside the COP28 conference.

Pacifico Mexinol is expected to reach Final Investment Decision in 2024 and Commercial Operations Date in late 2027.

December 11, 2023

Project finance, Project news, Raising capital

New Fortress Energy planning five industrial-scale hydrogen plants

The company is building a pure-play clean hydrogen business, known as Zero, which it plans to capitalize separately in the near future.

New Fortress Energy is planning to build five industrial-scale hydrogen production hubs as part of its pursuit of a pure-play clean hydrogen infrastructure business.

The liquefied natural gas company has started construction on its first plant in Beaumont, Texas, where it is expected to produce 50 tons per day of green hydrogen, the company said on its 3Q22 earnings call today.

New Fortress Energy is taking learnings from the construction of the Beaumont plant to scale up its hydrogen business via additional projects that will produce a combined 90,000 tons per year, according to a presentation.

The company is building a pure-play clean hydrogen business, known as Zero, which it plans to capitalize separately in the near future.

Plug Power will provide electrolyzers while Entergy will provide renewable power to the Beaumont plant, which is set to begin operations in 2024.

The location of the project in southeast Texas is near refineries with an anticipated demand of 1,000 tons per day – over 20 times what the Beaumont plant will produce initially, said Patrick Hughes, managing director and chief commercial officer of NFE Zero.

“So plenty of demand and plenty of growth potential in the immediate region,” the executive said, who noted the company was focused on optimizing offtake for the first phase of the project.

In addition to nearby refineries, the Beaumont project could also supply for an Entergy power plant known as Orange County Advanced Power station. Existing pipeline networks could also ship green hydrogen around the region.

“The good thing about electrolyzers is that it’s fairly straightforward to scale,” Hughes said.

November 8, 2022

Project finance, Project news, Raising capital

Electric Hydrogen secures $100m in corporate credit financing

The funding was led by HSBC, with participation from J.P. Morgan, Stifel Bank, and Hercules Capital.

Electric Hydrogen has secured $100m in corporate credit financing to support manufacturing and deployment of their 100 MW electrolyzer plants, which enable the lowest cost production of green hydrogen, the company said in a news release.

The funding was led by HSBC, with participation from J.P. Morgan, Stifel Bank, and Hercules Capital.

Electric Hydrogen, headquartered in Natick, MA, is leading critical industries such as steel, fertilizer, shipping and aviation towards decarbonization with its powerful, U.S.-manufactured electrolyzers, designed to deliver the lowest cost green hydrogen on earth.

“For more than 150 years, HSBC has been supporting businesses as they scale and transform industries worldwide,” said Matt Perlow, Director, HSBC Innovation Banking. “Our focus on financing innovative companies like Electric Hydrogen aligns with our mission of providing best-in-class banking services for our clients at every stage of their growth cycle. Clean technology and sustainability remain top priorities at HSBC, and we are thrilled to support Electric Hydrogen’s deployment of large-scale electrolyzer plants in its mission to decarbonize critical industries.”

“This facility marks a step-change in Electric Hydrogen’s access to capital and overall maturity as a business. With credit backing from some of the world’s largest and most well-known banks, we are well positioned to deliver gigawatts of electrolyzer plants in the coming years and enable our customers to meet their decarbonization goals,” states Derek Warnick, the company’s Chief Financial Officer.

Electric Hydrogen recently announced $65m in total Department of Energy support and $50m in equipment financing from Trinity Capital to scale its U.S. manufacturing at its Devens, MA gigafactory, one of the largest electrolyzer factories in the country. The gigafactory’s first electrolyzer stacks will be shipped later this year to a customer-sited project in southeast Texas. Electric Hydrogen also announced a 1 GW framework supply agreement with The AES Corporation last quarter.

“At J.P. Morgan, we are focused on serving companies who are helping decarbonize industries and building the green economy. We are pleased to support Electric Hydrogen in their next phase of growth, as they bring their 100MW electrolyzer plants to customers worldwide,” says Eric Cohen, Head of Green Economy Banking at J.P. Morgan Commercial Banking.

“Given the growing demand for cost-competitive, zero-carbon green hydrogen, we are excited to partner with Electric Hydrogen’s industry-leading team to help accelerate its manufacturing rollout and support deployment of their 100 MW electrolyzer plants,” remarks Greg Peterson, Managing Director of Hercules Capital.

May 9, 2024

Innovation, Raising capital

Exclusive: CO2-to-SAF tech firm in new capital raise

A technology company with a novel process to convert CO2 into fuels and chemicals is extending a capital raise that previously closed with inputs from several oil and airline majors.

OXCCU, the UK-based clean fuels production company, is extending a Series A raise it closed last year with an eye on growth in the US, CEO Andrew Symes told ReSource.

The raise, characterized as a Series A2 by Symes, is being conducted in-house, he said. It builds on the GBP 18m (USD 22.7m) Series A it finished last year, led by Clean Energy Ventures.

Aramco, ENI and United Airlines are also among the company’s backers.

OXCCU, a spin out of Oxford University, plans to raise additional money to scale its catalytic process converting hydrogen and carbon dioxide into sustainable aviation fuel (SAF) and other products. A patent grant, filed in 2020, is anticipated this year.

“We don’t want to be the project developer, we want to license to the project developer,” Symes said of the company’s business model.

Fuel made combining carbon dioxide (captured from industry or power plants) with green or clean hydrogen will be cheaper based on OXCCU’s iron-catalyst process, Symes said, which requires one step instead of the traditional two-step process.

OXCCU is looking for partners to engage with on sustainable aviation fuel (SAF) projects in the US, Symes said. This year the company will deliver a pilot plant in the US and plans to complete a 160 kilogram-per-day plant in Sheffield, UK in 2026.

April 16, 2024

exclusive

Project news, Raising capital

Arizona RNG firm seeking equity capital

A renewable natural gas developer with sites proposed in southern California and Arizona is seeking additional equity investors.

True North Renewable Energy Company, a Phoenix-based waste-to-energy developer, is undergoing a Series B equity raise, according to two sources familiar with the matter.

Whitehall & Company is advising, the sources said.

True North develops, builds, and operates organics-to-energy facilities, including large, regional, high solids anaerobic digestion infrastructure, according to its website.

The firm is primarily active in southern California and Arizona. Sites have been announced in Imperial County, Kern County and Mojave (all in California) as well as Yuma County, Arizona. Collectively, these could produce up to 3m mmbtu per annum, using up to 700,000 tons of organic compost from regional farms.

The company is a holding of True North Venture Partners, of Phoenix and Chicago.

TNRE and Whitehall did not respond to requests for comment.

April 12, 2023

exclusive

M&A, Project finance, Project news, Raising capital

Renewables developer exploring move into green hydrogen

North Carolina-based Strata Clean Energy is engaged with engineers and consultants in preparations for a potential move into the production of green hydrogen.

Strata Clean Energy, the North Carolina-based utility-scale renewables developer, is researching locations in the U.S. where it could potentially build a green hydrogen production plant, executives said in an interview.

“We’ve been doing some hydrogen work for the past few years,” said Tiago Sabino Dias, former CEO of Crossover Energy, which was acquired by Strata in a deal announced this week. That forward momentum on green hydrogen and other areas of the energy transition was part of the reason the deal with Strata was made, he said.

Sabino Dias is now the senior vice president of origination at Strata following the takeover.

“We’ve done a lot of work thinking about where the high-value locations are,” Strata’s Chief Development Officer Josh Rogol said in a separate interview.

Hydrogen is adjacent to Strata’s core competencies in energy storage, Rogol said. The company is confident it could supply the green kilowatt hours for hydrogen production and is researching offtake scenarios in transportation and industrial uses.

Strata has a 13 GW project pipeline of standalone and combined solar and storage, according to its website, with 4 GW under management.

The company’s IPP has about 1 GW with ambitions to grow, Rogol said. It’s go-forward pipeline comprises more than 100 projects across 26 states.

Strata is now engaged with several consultants and engineers to explore green hydrogen opportunities, Rogol said. The company is open to new advisory relationships across verticals.

“We think we are really well positioned to be both the energy supplier, as well as the molecule producer,” Rogol said. The capabilities and intellectual property acquired through Crossover put the firm six to 18 months ahead of other nascent developers.

Early-stage development in green hydrogen can be funded with Strata’s balance sheet, similar to Strata’s bilateral takeover of Crossover, Rogol said. Later stage development and EPC will require “an ecosystem of partners” potentially both financial and strategic, he added.

November 18, 2022