DANBURY, Conn. -- FuelCell Energy, Inc. (Nasdaq:FCEL), a global leader in the design, manufacture, operation and service of ultra‐clean, efficient and reliable fuel cell power plants, today announced that it has closed a long-term loan facility with Hercules Capital, Inc. (NYSE:HTGC) for up to $25 million to support the development of fuel cell projects. FuelCell Energy drew the first tranche of $15 million at closing. Up to an additional $10 million may be advanced under two subsequent tranches as FuelCell Energy attains certain performance and financial milestones.
“This credit facility provides growth capital as we pursue larger multi-megawatt projects,” said Michael Bishop, Senior Vice President and Chief Financial Officer, FuelCell Energy, Inc. “Obtaining corporate debt financing enhances our maturing capital structure as our fuel cell projects continue to attract preeminent financial institutions, reflecting the compelling economics of these projects and their ability to address energy resiliency issues in an environmentally friendly manner.”
The 30 month secured facility matures in October, 2018, and bears interest at a rate of 9.5% per annum, subject to the variability of the prime interest rate. In the first year of the long-term loan, only interest is payable. This interest-only period may be extended for up to 24 months if the Company achieves certain milestones. Further information with respect to this loan facility is contained in a Current Report on Form 8-K to be filed on or before April 20, 2016 by FuelCell Energy with the U.S. Securities and Exchange Commission.
FuelCell Energy power plants utilize an electro-chemical process to efficiently and cleanly generate power and steam. Using chemistry to convert a fuel into power instead of burning leads to ultra-clean power generation that has virtually no pollutants; including nitrogen oxide (NOx), which causes smog, sulfur dioxide (SOx), which contributes to acid rain, or particulate matter, which can aggravate asthma. The power plants are easy to site in cities as they are clean, quiet, use only minimal space and can be located where the power is used, minimizing or even avoiding the need for transmission towers. The power plants are fuel-flexible, capable of using clean natural gas, on-site renewable biogas, or directed biogas. The plants are very versatile and can be configured for affordable and scalable carbon capture, or generating 100 percent renewable hydrogen for vehicle fueling when operating on biogas.