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Crestmark EF Closes Tax Equity Sale-Leaseback Financing with FuelCell Energy

February 14, 2020, 07:25 AM
Filed Under: Energy

FuelCell Energy, Inc. announced it closed on a tax equity sale-leaseback financing transaction for the 2.8 MW Tulare BioMAT Project in Tulare, CA, with Crestmark Equipment Finance, a division of Metabank. Crestmark’s commitment totals $14.4 million through a 10-year sale-leaseback structure and further demonstrates the market’s interest in FuelCell Energy and its sustainable energy platforms. 

“We are thrilled to team up with Crestmark to add this important financing solution to our commercial deployment platform,” said Michael Bishop, Executive Vice President and Chief Financial Officer of FuelCell Energy. “Financing from Crestmark broadens FuelCell Energy’s financing relationships. Crestmark has a deep understanding of the quality solutions delivered by our products, including carbon neutral projects directly leveraging on-site biofuels. This efficient sale-leaseback financing structure enables FuelCell Energy to retain the Tulare BioMAT project in our generation portfolio, enhancing the Company’s recurring cash flows and margin.”

Adding this operating asset to the FuelCell Energy’s generation portfolio is expected to yield recurring revenue in excess of $2.5 million per year and increases the company’s operating assets to 28.9 MW. The company has another 44.3 MW in backlog, in various stages of development and construction with commercial operation dates ranging from 2020 through 2022.

“Crestmark is excited to add FuelCell Energy to our growing list of clean tech and alternative energy clients,” said Jon Ellis, Renewable Energy Vice President of Crestmark. “Crestmark is committed to all forms of alternative energy, dedicating resources to build expertise and deliver customized financial solutions to the energy industry. As a leader in megawatt scale class deployments of clean, efficient baseload power plants, FuelCell Energy is an important alliance for us, and we look forward to developing this relationship further.”

The net proceeds from the financing, after deducting an initial down payment on the lease, taxes and transaction costs, totaled approximately $10.5 million. Under the terms of the company’s senior secured credit facility with Orion Energy Partners Investment Agent, LLC and its affiliated lenders (Orion), the net proceeds of $10.5 million were deposited into a restricted cash account for future distribution at the discretion of Orion for use to construct another project, for working capital support or for repayment of principal under the Orion facility. Initial distributions will include $1 million to a module reserve account for the benefit of Orion under the terms of the credit agreement. In addition, approximately $3.0 million of proceeds will be released to fund interest due under the Orion credit facility as well as certain reserves, interest and accrued and unpaid dividends for on the Series B Preferred Stock issued by the Company and the Series 1 Class A Preferred Stock Shares issued by FCE FuelCell Energy Ltd. and guaranteed by the Company.

FuelCell Energy, based in Connecticut, is a leader in molten carbonate fuel cell technology with its purpose being to use its proprietary, state-of-the-art fuel cell platforms to enable a world empowered by clean energy.

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