Banco Bilbao Vizcaya Argentaria (BBVA) has outlined its thoughts on geothermal’s “remarkable transformative potential” in a statement following its participation in the recent groundbreaking Cape Phase I project financing in the USA.
The Spanish multinational financial services group played a key role as Coordinator Lead Arranger and Hedging Coordinator in the financing of the project, which is being developed by Fervo Energy in Beaver County, Utah.
BBVA noted that the project marks a milestone in the commercial-scale deployment of next-generation geothermal in the country.
“Next-generation geothermal technologies are demonstrating remarkable transformative potential,” said Miguel Peña, responsible for project finance at BBVA in the United States and Canada.
“Their ability to scale commercially will be critical to strengthening the renewable energy mix by providing firm and reliable generation that complements intermittent sources such as solar and wind.”
The deal also flags BBVA’s capabilities across the energy sector more broadly and reinforces its presence as a leading project financier in the US market, according to Peña.
“Our commitment as a financial institution is to help innovative cleantech projects be structured and developed with a long-term perspective, facilitating their access to the market,” he said.
Developer Fervo Energy announced earlier in March the successful close of US$421mn in non-recourse debt financing for the Cape Phase I project, calling it a ‘first of a kind’ and an indication of the bankability of enhanced geothermal systems (EGS).
Other major commercial banks and insitutions involved in the project financing include Barclays, HSBC, MUFG, RBC Capital Markets and Société Générale.
All have a wealth of experience as lenders to energy and infrastructure projects globally.
The involvement of such major lenders signals growing investor confidence in geothermal as part of the energy transition, both in the USA, and more broadly across the globe.
BBVA noted that its participation in the Cape Phase I financing “further consolidates its role as a strategic financial partner to the cleantech ecosystem” and “reinforces its position as one of the leading institutions in the financing of innovative energy projects in the United States.”
The bank added that it intended to continue to promote the development of next-generation infrastructure and accelerate the transition to a low-carbon economy.