FuelCell Energy announced a $30 million project financing facility with PNC Energy Capital, LLC, a full service capital provider to the renewable energy and demand side management segments of the energy industry. This facility provides long term financing for projects that the Company is developing under power purchase agreements (PPA).
PNC Energy Capital will provide financing through a sale / leaseback structure to select project subsidiaries formed and owned by FuelCell Energy. The financing facility monetizes the tax benefits and cash flows from customer power purchase agreements.
“PNC is committed to renewable energy, dedicating resources and building expertise to customize finance programs for the energy services industry,” said Dick Rai, senior vice president and manager of PNC Energy Capital LLC. “As a leader in megawatt scale class deployments of clean, efficient baseload power plants, FuelCell Energy is an important strategic alliance for us, offering long-term opportunities and, most notably, adding fuel cells to our growing portfolio of clean and renewable assets.”
Financing from PNC Energy Capital will broaden FuelCell Energy’s financing capabilities, which is expected to accelerate deployment of fuel cell projects. “We are excited to team up with PNC and add this important and scalable financing structure to our commercial deployment platform,” said Michael Bishop, Senior Vice President and Chief Financial Officer. “This efficient financing platform enables FuelCell Energy to retain management of certain power purchase agreements and should further enhance cash flows and service margins”.
The first project to close under this structure is expected to be the previously announced 1.4 megawatt (MW) fuel cell power plant which provides both electricity and heat to the University of California, Irvine Medical Center (UCI). The power plant will generate about 30 percent of the facility power needs, while the heat produced will be used in a direct exhaust absorption chiller to produce 200 tons of cooling for an office building and associated institutional requirements. The installation is expected to achieve commercial operations in December 2015, at which time, the project will be financed under this PNC financing facility. FuelCell Energy will operate and maintain the plant and sell power under a long-term power purchase agreement to UCI. The agreement with PNC Energy Capital is subject to achieving certain customary closing conditions.
Energy financing is provided by PNC Energy Capital LLC, a wholly-owned subsidiary of PNC Equipment Finance, LLC, a wholly-owned subsidiary of PNC Bank, N.A., member of The PNC Financial Services Group, Inc.