Hecate Energy arranges landmark $550 million debt facility

Hecate Energy, a Chicago-based renewable energy project developer, closed a five-year $550 million debt facility package from ten lenders.  The facility consists of a $250 million term loan and $300 million letter of credit that will be collateralized by the developer’s 35 GW multi-year development pipeline and its minority interest in storage business Hecate Grid, a joint venture between Hecate Energy and InfraRed Capital Partners.

Investec, Nomura Securities and National Bank of Canada led the debt financing, with Deutsche Bank and Generate Capital also coordinating lead arrangers. PEI Global Partners was Hecate’s financial advisor on the landmark transaction. Norton Rose Fulbright represented the lender group.

Proceeds from the loan refinanced an existing loan facility at a lower cost to Hecate, and the letters of credit facility enable Hecate to issue numerous grid interconnection and power purchase agreement letters of credit to achieve sales of 5 GW or more per year across its asset portfolio.

“Securing the letter of credit of this size against a pure play renewables developer’s active project development pipeline has never been done before,” Chris Bullinger, chief executive officer of Hecate Energy, told pv magazine USA. “This innovative debt facility package indicates a high degree of market confidence in Hecate Energy’s strong track record of successful renewables development.”

“We are leveraging our global financial and intellectual capital to provide funding and tailored financing solutions to companies like Hecate Energy, who are helping to fuel the energy transition,” said Vinod Mukani, global head of Nomura’s infrastructure and power group.  “Executing on this transaction is particularly exciting as Hecate Energy retains an experienced and talented team and an attractive business strategy which we are happy to support.”

Hecate Grid was formed in 2018 as a joint venture between Hecate Energy and InfraRed Capital. The business currently has an active portfolio of 5 GW of storage projects in various phases of development. Besides Texas and California, where it has 1.15 GW and 1.95 GW procured for development, respectively, the developer has projects in the works in New York, where its Swiftsure Energy Storage (650 MW) project in Staten Island remains in active development, according to a NYISO interconnection queue update.

Hecate Energy was formed in 2012 and in May 2021 received a minority investment by Repsol, a Spanish energy company, which acquired a 40% interest in the developer. With 1.5 GW of active or development-stage solar and wind projects, Hecate Energy is consistently named a top ten US developer.

The company is building the largest solar project in New York, the 500 MW Cider Solar Farm. Located on 3,000 acres in the towns of Elba and East Oakfield, N.Y., part of National Grid’s service territory, it received a permit from the N.Y. Office of Renewable Energy Siting (ORES) in July 2022 to build the project. Construction is on track to take place this year with 495 construction workers engaged in the construction.

Cider Solar is the first solar project application to receive approval under New York’s new Section 94-c law, which was designed to implement new solar projects.