In the United States (US), FuelCell Energy, Inc. a global leader in fuel cell technology has announced that it has closed on a tax equity financing transaction with financial services provider East West Bank, a wholly-owned subsidiary of East West Bancorp, Inc for the 7.4 MW fuel cell project located on the U.S. Navy Submarine Base in Groton, Connecticut (CT), also known as the Submarine Force.
East West Bank’s tax equity commitment totals US$15 million, and FuelCell Energy highlight that this commitment “further demonstrates the market’s interest in financing FuelCell Energy’s distributed sustainable energy platforms as the Company works with customers to achieve their decarbonization and enhanced grid resiliency goals.”
We are thrilled to team up with East West Bank, partnering on this important financing solution and supporting our commercial platform deployment. This efficient financing enables FuelCell Energy to retain most of this project’s long-term, recurring cash flow and creates a structure that will facilitate additional capital opportunities that are expected to further return cash to the Company and enhance the overall return on equity for this project, said Michael Bishop, EVP and CFO of FuelCell Energy.
The Company continues to advance the project through mechanical completion and expects commercial operations to commence prior to the end of September 2021. Following this FuelCell Energy expects to add back-leverage debt financing to complete the project’s capital structure.
East West Bank is delighted to partner with FuelCell Energy on the fuel cell project located on the U.S. Navy Submarine Base in Connecticut. As a leader in financing clean and alternative energies, we look forward to seeing the U.S. Navy and the Groton community benefit from this important project, said Christopher Simeone, SVP with East West Bank.
FuelCell Energy installed 7.4 MW of “SureSource” power platforms at the U.S. Navy Submarine Base in Groton, CT to provide a long-term supply of power to an existing electrical substation. The fuel cell plant is part of a multifaceted plan by the Connecticut Municipal Electric Energy Cooperative (CMEEC) to provide new power resources and support the desire of the Department of Defense to add resiliency and grid independence to key military installations.
The highly efficient fuel cell power generation project minimizes carbon output while providing continuous power to the strategic military base. The U.S. Navy continues to purchase power from CMEEC and Groton Utilities, which in turn purchase the power from FuelCell Energy under a 20-year power purchase agreement.
This pay-as-you-go structure enables CMEEC and the Navy to avoid direct investment in owning the power plant which will be operated and maintained by FuelCell Energy.
The U.S. Navy Submarine Base project is a milestone project for FuelCell Energy, demonstrating our high quality and reliable clean energy solution that enables electrical resiliency with the country’s most critical infrastructure while supporting the Navy’s decarbonization goals. The United States Defense Critical Electrical Infrastructure initiative is important to national security, and we are honored to have an opportunity to deploy our platform in a microgrid configuration towards this mission,” Few added. “We are optimistic that the current policy focus on infrastructure should present additional opportunities to deploy our SureSource platform in support of the Defense Critical Electrical Infrastructure initiative, said Jason Few, President and CEO of FuelCell Energy.