X-Caliber Rural Capital (“XRC”), the nation’s top USDA lender by volume for FY 2023, today announced that its affiliate, XRL-ALC, LLC, (“XRA”), has closed a $100MM bridge loan to support Phase I development of Fervo Energy’s Cape Station project in Beaver County, Utah. The Cape Station project is the world’s largest next-generation geothermal project.
X-Caliber Rural Capital owns XRL-ALC, LLC, (“XRA”), an affiliate that offers conventional construction financing for commercial real estate and infrastructure projects located in “micro-rural areas.” Cape Station is located about 7.5 miles northeast of Milford.
XRA provided $65MM to fund development costs associated with the sub-surface development (geothermal wells, pads, roads, and associated infrastructure), as well as $35MM to fund development costs associated with surface development (power plants and associated energy collection and distribution infrastructure).
Cape Station Phase I will generate 90 MW of renewable energy capacity and is expected to be completed by June 2026. Phase I is part of a multi-phased development that will create 400 MW of carbon-free, firm capacity to supply around-the-clock power to the grid by 2028.
“We are extremely pleased to provide financing for a project that will deliver much-needed energy while supporting the local economy and job creation,” said Jordan Blanchard, Co-Founder of X-Caliber Rural Capital. “Helping this significant project advance and grow in rural America is a true testament to how investing in communities and businesses not only has local influence, but can have a global, long-lasting impact by promoting sustainability and stimulating rural economies.”
X-Caliber Rural Capital is an affiliate of X-Caliber Capital Holdings LLC (“X-Caliber”), a direct commercial real estate finance company whose platforms provide direct mortgage lending and other real-estate lending and investing services.
“This is a milestone transaction for X-Caliber, and we are thrilled to support this ground-breaking technology that is shaping the future of energy,” said Chris Callahan, President, and CEO of X-Caliber. “Our team provided innovative, short-term financing for two critical portions of the project’s development, leveraging our unique expertise in an effort to help harness innovation and expand the energy ecosystem.”
The project is already contracted to deliver up to 400 MW of renewable energy to utilities in California that will supply hundreds of thousands of local homes with power. In addition, multiple phases of development at Cape Station are expected to produce 6,600 construction jobs and 160 full-time positions.
Fervo Energy continues to have a major macroeconomic impact on every sector of the economy. With the increase in artificial intelligence data centers, the Electric Power Research Institute says electricity consumption could double by 2030. With demand increasing and putting additional strain on the country’s aging power grid, the development of next-generation geothermal power is critical for the nation’s energy supply and the environment.
“Fervo's rapid drilling advancements, 15-year fully contracted offtake from investment grade buyers, firm transmission rights, approval of nearly all required permits, and procurement of all major electrical equipment demonstrates why Fervo is an ideal candidate for project-level debt financing,” says Tim Latimer, CEO and co-founder of Fervo Energy. “This financing confirms that commercial scale EGS is a today resource, with continued and significant growth potential in the coming years.”
Fervo’s Cape Station project was recently one of three enhanced geothermal systems (EGS) projects selected for funding from the Department of Energy’s EGS Pilot Demonstrations program. The $25 million grant is the largest single award ever given out by the DOE Geothermal Technologies Office.
Cape Station is poised to invest $1.1 billion into supply chains and local businesses, driving critical growth in the county. As the world’s largest next-generation geothermal project, Cape Station will become a major asset to the Milford Valley, revitalizing the local economy and providing employment opportunities for its diligent residents.
The Cape Station Project will be the first utility-scale, greenfield geothermal energy project for Fervo.
