In a release yesterday, Calpine Corporation, one of the leading producers of renewable geothermal energy, announced the closing of a $1.1 billion Climate Bonds Certified financing for its wholly-owned subsidiary, Geysers Power Company, LLC (“GPC”).
The financing consists of a $900 million senior secured term loan and a $200 million letter of credit facility. The Green Loan will bear interest at LIBOR plus 2.00% per annum, increasing by 0.125% every three years, and matures in 2027. GPC intends to use the proceeds of this financing to repay Calpine for equity invested in GPC, as well as to fund ongoing operations, maintenance and capital expenditures. Calpine intends to use its equity proceeds to repay corporate and project-level debt and for working capital and other general corporate purposes.
DNV GL, a Climate Bonds Initiative (CBI) Approved Verifier, has performed the pre-issuance verification of the Green Loan.
GPC owns 13 geothermal power plants at The Geysers, which is the largest complex of geothermal power plants in the U.S. and is responsible for providing almost one-tenth of the renewable power produced in California every year. By virtue of its steam resources, interconnected fields and water reinjection capabilities, The Geysers is a unique geothermal facility that sustainably generates reliable power for its customers in Northern California year in and year out.
MUFG Bank, BNP Paribas, Crédit Agricole, Natixis, Mizuho Bank, National Bank of Canada, Sumitomo Mitsui, SunTrust Robinson Humphrey, CoBank, Rabobank, ING Capital and DZ Bank acted as lead arrangers on the transaction. In addition, MUFG Bank acted as Administrative Agent and First Lien Collateral Agent, BNP Paribas acted as Syndication Agent, and Crédit Agricole and Natixis acted as Green Loan Coordinators. White & Case LLP acted as borrower counsel and Latham & Watkins LLP acted as lender counsel on the transaction.
Calpine Corporation is one of America’s largest generators of electricity from natural gas and geothermal resources with operations in competitive power markets. Our fleet of 77 power plants, including one under construction, represents over 26,000 megawatts of generation capacity. Through wholesale power operations and our retail businesses, Calpine Energy Solutions and Champion Energy, we serve customers in 23 states, Canada and Mexico. Our clean, efficient, modern and flexible fleet uses advanced technologies to generate power in a low-carbon and environmentally responsible manner. We are uniquely positioned to benefit from the secular trends affecting our industry, including the abundant and affordable supply of clean natural gas, environmental regulation, aging power generation infrastructure and the increasing need for dispatchable power plants to successfully integrate intermittent renewables into the grid.
About Geysers Power Company
GPC is the single largest geothermal power producer in the United States, with a 725 MW fleet of 13 plants in operation in California. All of GPC’s geothermal assets are located in an area called The Geysers in the Mayacamas Mountains of northwestern California. GPC sells electricity, resource adequacy capacity and green attributes to wholesale customers, including electric utility companies, community choice aggregators and electric cooperatives.
CBI is an international, investor-focused not-for-profit working to mobilize the $100 trillion bond market for climate change solutions. Among their services, the CBI administers a global green bond Certification scheme that requires certified investment products to meet sector-specific criteria established by the organization’s Climate Bonds Standard, thus ensuring that the related funds are being used to deliver a low-carbon and climate-resilient economy.