Orion Energy, GCM Grosvenor and Voya close on US$365m partnership with Bakersfield Renewable Fuels
In the United States (US), Orion Energy Partners, L.P. (Orion Energy), GCM Grosvenor, and Voya Investment Management (Voya) have announced a capital partnership with Bakersfield Renewable Fuels (BKRF), a special purpose vehicle wholly owned by Global Clean Energy Holdings, Inc. (GCEH) created to purchase the existing Alon Bakersfield Refinery in Bakersfield, California. BKRF will retool a portion of the refinery into a renewable diesel biorefinery.
The project will use traditional biofuel feedstocks such as used cooking oil (UCO), waste fats, oils, and greases (FOG) along with camelina oil to produce renewable diesel and other renewable products such as liquid propane, green naphtha. Sustainable Oils Inc., a wholly-owned subsidiary of GCEH has developed proprietary camelina, a fast-growing, low input, dryland farm, wheat rotation crop.
GCE is thrilled to partner with Orion Energy, GCM Grosvenor, and Voya as we embark on this exciting new venture. Despite challenging market conditions, with the support and creativity of our financing partners we will have the necessary resources to make the project a success and deliver meaningful economic and environmental benefits to the region, said Richard Palmer, CEO of Global Clean Energy Holdings.
Renewable diesel is an established ‘drop-in replacement’ fuel for diesel, is 100 percent sustainable, and can reduce greenhouse gas (GHG) emissions by up to 80 percent when compared to conventional petroleum diesel. The project’s output will be sold under a long-term offtake agreement with an undisclosed multinational oil major.
We are pleased to partner with GCM Grosvenor and Voya on this financing to support GCEH. This investment in a truly unique, independent, renewable refinery is a terrific example of Orion Energy’s value proposition in providing creative and deeply structured financing solutions for environmentally innovative energy infrastructure, said Gerrit Nicholas, Founder and Managing Partner at Orion Energy Partners.
Repurposing to a biorefinery underway
BKRF’s retooling of the refinery is expected to take 18 to 20 months. Design, engineering, and construction are being supported by a consortium of leaders in the downstream and renewable fuels industry. The primary work will be conducted by union trades through a local Bakersfield engineering, procurement, and construction (EPC) contractor, ARB, Inc., a Primoris Services Corp subsidiary.
GCM Grosvenor is excited about this collaboration with Orion Energy and Voya to finance GCE’s transformative renewable refinery, which will move us one step closer to a sustainable future. This transaction is a great example of our Labor Impact Strategy’s ability to provide structured financing solutions and infrastructure development expertise in partnership with value-added union labor to help drive positive investment outcomes, said Matthew Rinklin, Managing Director at GCM Grosvenor.
The investment in the biorefinery marks the third investment in the last year for the Labor Impact Strategy.
Voya is thrilled to work with GCEH, Orion, and GCM Grosvenor on this groundbreaking transaction, which is a perfect fit with Voya’s recent expansion into the renewable energy and sustainable infrastructure space, adding to Voya’s three decades of diversified infrastructure lending, said Tom Emmons, Co-Head, Direct Infrastructure/Private Credit.
Latham & Watkins LLP acted as legal counsel to Orion Energy. Akin Gump Strauss Hauer & Feld LLP acted as legal counsel to GCM Grosvenor and Voya. King & Spalding acted as legal counsel to GCEH and TroyGould acted as acquisition counsel and corporate counsel to GCEH.