Calpine Corp. has landed a $100 million, non-recourse credit facility, representing the first single-asset merchant financing obtained in California since the energy market turmoil of 2001. The loan will help support the construction of a 600 MW, natural gas-fired plant set to come online in June in San Jose. Improving market conditions and heightened demand for generation in the Bay Area, where it is difficult to find sites, encouraged the San Jose IPP to seek debt, saidRobert Kelly, cfo., adding Calpine Energy Services will purchase the plants output.
Calpine's decision to serve as general contractor for the Metcalf Energy Center through its subsidiary, Calpine Construction Management Company, helped it reduce costs, noted Kelly. The total cost runs about $500 million, with Calpine providing the equity. Some portion of the construction could also be funded with debt issued at the corporate level, he added, declining to be more specific.
The credit facility will mature in 2008 and carries a variable interest rate, which Kelly declined to specify. ING Capital was chosen as lead arranger for the financing based on its longstanding relationship with Calpine and the fact that it has structured similar transactions in the past, Kelly said. Bayerische Landesbank served as co-arranger and syndication agent.