FuelCell Energy (NASDAQ: FCEL) Secures Financing for Sustainable Clean Energy Projects in Connecticut

2 min read | April 30, 2024 06:00 AM AEST | By Team Kalkine Media

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FuelCell Energy (NASDAQ: FCEL) Secures Financing for Sustainable Clean Energy Projects in Connecticut — Image source: Shutterstock.com

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FuelCell Energy, Inc., (NASDAQ: FCEL) a leading provider of sustainable clean energy solutions, has announced the successful closure of a project debt financing transaction with Liberty Bank and Connecticut Green Bank for two fuel cell projects in Derby, Connecticut. These projects, which have recently commenced operations, represent a significant step towards addressing the world's critical challenges related to energy, safety, and urbanization.

The financing arrangement, structured as back leverage to a project finance subsidiary of FuelCell Energy, is supported by the robust cash flows generated by the projects and the investment-grade quality of the offtakers. Liberty Bank has provided a senior commitment of $6.5 million, while Connecticut Green Bank's commitment stands at $3.0 million. Additionally, Connecticut Green Bank will contribute an additional subordinated credit facility of $3.5 million, bringing the total gross financing to $13 million.

The senior facility has a term of seven years, while the subordinated credit facility spans 14 years. The interest rates for the senior debt and subordinated debt are fixed at 7.25% and 8%, respectively. The transaction was finalized on April 25, 2024, with net funding to FuelCell Energy totaling approximately $11.6 million after accounting for transaction fees and debt service reserves.

Michael Bishop, Executive Vice President and Chief Financial Officer of FuelCell Energy, expressed gratitude for the partnership with Liberty Bank and Connecticut Green Bank, emphasizing their support through efficient and cost-effective financing. Bishop highlighted the confidence shown by the banks in the long-term performance of FuelCell Energy's fuel cell platforms, enabling the company to pursue growth initiatives worldwide and meet customers' clean energy needs.

The two Derby projects financed through this arrangement include a 14-megawatt fuel cell park, the second largest in the U.S., and a 2.8-megawatt baseload fuel cell project. These projects are part of FuelCell Energy's commitment to delivering competitively priced baseload class I renewable energy under 20-year power purchase agreements with Eversource and United Illuminating. In Connecticut, class I renewable energy sources include electricity produced from wind power, geothermal power, or fuel cells.

Both projects utilize fuel cell modules manufactured in America at FuelCell Energy's Torrington, Connecticut, factory, utilizing predominantly U.S.-based materials and suppliers. These initiatives underscore FuelCell Energy's dedication to supporting domestic manufacturing and contributing to the nation's clean energy transition.

FCEL shares ended trading session on 29 April 2024 at US$0.93 apiece.

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