FuelCell Energy closed a long-term loan facility with Hercules Capital, for up to $25 million to support the development of fuel cell projects.

The company 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, FuelCell Energy’s senior vice president and CFO. “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.

FuelCell Energy power plants utilize an electro-chemical process to efficiently and cleanly generate power and steam.

Hercules Capital is a specialty finance company focused on providing senior secured venture growth loans to high-growth, innovative companies.