Enviva LP, a midstream supplier of sustainably sourced wood pellets and other processed biomass fuel to generators in the United States and Europe, closed a $120 million senior secured credit facility, the company’s first corporate borrowing. Barclays Bank, Goldman Sachs and Royal Bank of Canada served as joint lead arrangers and joint bookrunners.

“This substantial commitment by the joint lead arrangers and the other financing banks is an important step in right-sizing Enviva’s balance sheet,” said Steve Reeves, the company’s executive vice president and CFO. “As one of the first credit underwritings of its kind in the emerging biomass renewable energy sector, we’re delighted by the strong show of confidence from leaders in the banking industry.”

The proceeds of the debt offering will be used to complete the construction of two new 500,000 metric ton per year pellet mills, one each in Virginia and North Carolina, and to increase the storage capacity of Enviva’s deep-water port terminal in Chesapeake, VA to approximately 100,000 metric tons. This construction and expansion will complement Enviva’s existing manufacturing base and large operating footprint in the Mid-Atlantic, Mississippi and Alabama.

Enviva’s 1.72 million tons of combined annual capacity will help fulfill existing long-term supply agreements for the company’s solid renewable fuels to major European utility customers.