Fervo Energy, a global company of next-generation geothermal deployment, closed $421 million in non-recourse debt financing for the first phase of its flagship Cape Station development. This oversubscribed financing marks Cape Station’s transition from early stage and bridge funding to a long-term, non-recourse project capital structure.
“Non-recourse financing has historically been considered out of reach for first-of-a-kind projects,” David Ulrey, chief financial officer at Fervo Energy, said. “Cape Station disrupts that narrative. With proven oil and gas technology paired with AI-enabled drilling and exploration, robust commercial offtake, operational consistency and an unrelenting focus on health and safety, we have shown that EGS is a highly bankable asset class.”
The $421 million financing package includes a $309 million construction-to-term loan, a $61 million tax credit bridge loan and a $51 million letter of credit facility. Together, these facilities will fund the remaining construction costs for the first phase of Cape Station and support the project’s counterparty credit support requirements.
RBC Capital Markets served as Fervo’s financial advisor and was a coordinating lead arranger alongside Barclays, BBVA, HSBC, MUFG and Société Générale. Other participating lenders included J.P. Morgan, Bank of America, and Sumitomo Mitsui Trust Bank (New York branch). White & Case acted as sponsor counsel for Fervo, while Norton Rose Fulbright acted as counsel for the lender group.
“As demand for firm, clean, affordable power accelerates, EGS is set to become a core energy asset class for infrastructure lenders,” Sean Pollock, managing director, project finance at RBC Capital Markets, said. “Fervo is pioneering this step change with Cape Station, a vital contribution to American energy security that RBC is proud to support.”
