- Increases the Company’s generation portfolio to 26.1 megawatts
- Fuel cell park is one of the largest producers of renewable energy credits in CT
DANBURY, Conn., Nov. 05, 2018 — FuelCell Energy, Inc. (Nasdaq: FCEL), a global leader in delivering clean, innovative and affordable fuel cell solutions for the supply, recovery and storage of energy, today announced that it has entered into an agreement to acquire the existing 14.9 megawatt fuel cell park in Bridgeport, CT from Dominion Energy. FuelCell Energy developed, constructed and commissioned the Bridgeport fuel cell park in December of 2013. FuelCell Energy has operated and maintained the plant under a service agreement with Dominion Energy since it was commissioned.
FuelCell Energy intends to own and operate the plant as part of its generation portfolio. The transaction is expected to:
- Add annual revenue in excess of $15 million per year;
- Deliver EBITDA margins in excess of 50%, and
- Be accretive to FuelCell Energy’s earnings per share.
Under the terms of the agreement, FuelCell Energy will acquire 100% of the equity interest in Dominion Bridgeport Fuel Cell, LLC, the owner of the 14.9 MW project asset, whose parent is currently Dominion Energy. This agreement is the result of a competitive bid process undertaken by Dominion Energy.
“The purchase of the Bridgeport fuel cell park project from Dominion Energy is strategically important for FuelCell Energy,” said Chip Bottone, President and Chief Executive Officer, FuelCell Energy, Inc. “We undertook the construction of this project in 2012 with the support of Dominion Energy, leading to substantial benefits for numerous stakeholders.”
Mr. Bottone continued, “Having been the operator of the Bridgeport fuel cell park for the past five years, we are uniquely positioned to acquire and benefit from this established project. This important acquisition will materially accelerate our strategy to retain generation assets and to benefit from their financial profile of consistent revenues, operating profits and cash generation. Lastly, I would like to acknowledge the continued support of the Connecticut Green Bank who supported us five years ago in the construction of this project, and is playing a key role in financing this acquisition.”
Total cash consideration to be paid is $36.6 million. FuelCell Energy expects to fund the acquisition with a combination of third party financing and $15 million of restricted cash on hand that is tied to the project and would be released at closing. Financing for this acquisition is expected to include a term lender and the Connecticut Green Bank, who also participated in the initial financing of the construction of the project. The closing of this transaction is expected to happen on or before December 31, 2018, subject to customary closing conditions and contingencies including closing third party financing.
“We were excited to play an integral part in this project since its inception, development, and commissioning, and are equally thrilled to have the opportunity to help FuelCell Energy purchase the project,” said Bryan Garcia, President and CEO of the Connecticut Green Bank. “This project is important to the Connecticut Green Bank as it uses a technology manufactured in our state which creates jobs, is located on a remediated brownfield in an industrial zone, is helping our largest city with economic development through private investment in green energy, and is reducing greenhouse gas emissions that cause climate change. The fuel cell park is one of the largest in the world bringing reliable and resilient power to our electric grid.”
This acquisition will bring Fuel Cell Energy’s generation portfolio to 26.1 MW, which coupled with 83 MW of new project awards and backlog, provides a line of sight to achieving the company’s long-term generation portfolio milestone of 60 MW.