Orion Energy Partners, GCM Grosvenor and Voya Investment Management closed a $365 million strategic capital partnership with Bakersfield Renewable Fuels, a Global Clean Energy Holdings subsidiary. As part of the partnership, GCM Grosvenor will provide $85 million in debt financing to Bakersfield Renewable Fuels.
Bakersfield Renewable Fuels is a special purpose vehicle wholly owned by Global Clean Energy Holdings (GCE), which was created to purchase an existing refinery in Bakersfield, CA. Bakersfield Renewable Fuels will retool a portion of the refinery into a renewable diesel bio-refinery. The project will use Global Clean Energy Holdings’ proprietary camelina oil as well as traditional biofuel feedstocks such as waste fats, oils and greases to produce renewable diesel and other renewable products (liquid propane and naphtha). Renewable diesel is an established ‘drop in replacement’ fuel for diesel, is 100% sustainable and can reduce greenhouse gas emissions by up to 80% when compared with conventional diesel. The project’s output will be sold under a long-term offtake agreement with a multinational oil major.
Design, engineering and construction is supported by a consortium of leaders in the downstream and renewable fuels industry. The primary work will be conducted by union trades through a local Bakersfield EPC contractor, ARB, Inc., a Primoris Services Corp subsidiary.
“GCE is thrilled to partner with Orion Energy, GCM Grosvenor and Voya as we embark on this exciting new venture,” Richard Palmer, CEO of Global Clean Energy Holdings, said. “Despite challenging market conditions, with the support and creativity of our financing partners, we will have the necessary resources to make the project a success and deliver meaningful economic and environmental benefits to the region.”
“We are pleased to partner with GCM Grosvenor and Voya on this financing to support GCE,” Gerrit Nicholas, founder and managing partner at Orion Energy Partners, said. “This investment in a truly unique, independent, renewable refinery is a terrific example of Orion Energy’s value proposition in providing creative and deeply structured financing solutions for environmentally innovative energy infrastructure.”
“GCM Grosvenor is excited about this collaboration with Orion Energy and Voya to finance GCE’s transformative renewable refinery, which will move us one step closer to a sustainable future,” Matthew Rinklin, managing director at GCM Grosvenor, said. “This transaction is a great example of our Labor Impact Strategy’s ability to provide structured financing solutions and infrastructure development expertise in partnership with value-added union labor to help drive positive investment outcomes.”
“Voya is thrilled to work with GCE, Orion and GCM Grosvenor on this groundbreaking transaction, which is a perfect fit with Voya’s recent expansion into the renewable energy and sustainable infrastructure space, adding to Voya’s three decades of diversified infrastructure lending,” Tom Emmons, co-head of direct infrastructure/private credit at Voya Investment Management, said.
Latham & Watkins acted as legal counsel to Orion Energy. Akin Gump Strauss Hauer & Feld acted as legal counsel to GCM Grosvenor and Voya. King & Spalding acted as legal counsel and TroyGould acted as acquisition counsel and corporate counsel to Global Clean Energy Holdings.
Global Clean Energy is a developer of sustainable, non-food energy crops for use in biofuels and renewable chemicals.
Orion Energy Partners is a private capital partner to lower/middle market energy infrastructure and related companies, primarily in North America, managing in excess of $2 billion of investable capital. The company provides non-control and non-dilutive capital in senior secured loan structures as an alternative to equity investment and traditional loans.
GCM Grosvenor is a global alternative asset management firm with $55 billion in assets under management in hedge fund strategies, private equity, infrastructure, real estate, credit and multi-asset class solutions.
Voya Investment Management is an asset management firm. As of March 31, 2020, the company managed more than $210 billion for affiliated and external institutions as well as individual investors.