Major international finance groups have contributed to a raise of more than half-a-billion US dollars in funding for developer Hecate Energy.
Hecate Energy develops wind, solar and energy storage projects in the US, claiming to have a combined 3.6GW under contract, together with a development pipeline in excess of 35GW.
The company has secured a US$550 million credit facility with a five-year term, led by Investec and Nomura Securities International, while National Bank of Canada and Deutsche Bank were also involved as arrangers and syndicators.
Specialist impact investing firm Generate Capital was coordinating lead arranger, with a total of 10 lenders participating. Law firms Norton Rose Fulbright and Winston & Strawn were lenders’ counsel and borrower’s counsel respectively.
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It’s perhaps worth noting that Investec and Nomura Group also participated in the recent raise of US$320 million corporate credit facilities for Canada-headquartered energy storage developer Aypa Power, which is in the portfolio of investment manager Blackstone.
In Hecate’s case, the credit facility comprises a US$250 million term loan, and a US$300 million letter of credit (LC).
Hecate Energy said the borrowing will be collateralised by its 35GW+ pipeline, while it will also be collateralised by the company’s continued minority equity interest in Hecate Grid, the independent power producer (IPP) formed as a joint venture (JV) between Hecate and investor InfraRed Capital Partners.
Hecate Grid has numerous large-scale battery storage projects in its own pipeline including a 750MW/1,500MWh portfolio in Texas’ ERCOT market and a single 300MW/1,200MWh battery energy storage system (BESS) project in Los Angeles County, California. The JV was spun out and now operates separately from Hecate Energy as a standalone entity.
The developer described its credit facility as “innovative,” and said it was brokered without credit support, due to its collateralisation. The term loan meanwhile is being used to refinance an existing loan facility at lower cost.
Hecate Energy said the letter of credit will enable it to generate annual project sales of 5GW or more as it will unlock the ability to execute various interconnection agreements and power purchase agreements (PPAs).
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