Fervo Energy, a geothermal energy specialist based in Houston, Texas, has closed a non-recourse debt amounting to US$421 million for the first phase of its flagship Cape Station development in Utah.  

The financing package includes a US$309 million construction-to-term loan, a US$61 million tax credit bridge loan, and a US$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 adviser 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 represented the lenders.   

“As demand for firm, clean, affordable power accelerates, EGS is set to become a core energy asset class for infrastructure lenders,” says Sean Pollock, managing director, project finance, at RBC Capital Markets. “Fervo is pioneering this step change with Cape Station, a vital contribution to American energy security that RBC is proud to support.” 

The oversubscribed financing marks Cape Station’s transition from early-stage and bridge funding to a long-term, non-recourse project capital structure, and helps establish the bankability of Enhanced Geothermal Systems. 

Bankable asset class

“Non-recourse financing has historically been considered out of reach for first-of-a-kind projects,” notes Fervo chief financial officer David Ulrey. “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.”  

EGS refers to human-made geothermal reservoirs created in areas where hot underground rock exists but lacks the natural water or permeability ( cracks ) required to extract its heat.

Amid surging power demand from data centres, a resurgence in domestic manufacturing, and accelerating electrification, energy markets are racing to secure clean, affordable, and reliable power.  

Located in Beaver County, Utah, Cape Station will begin delivering power to the grid in 2026, reaching approximately 100 megawatts of operating capacity by early 2027.  It will deliver 500MW of carbon-free baseload power to the grid upon full completion in 2028.

The development is fully contracted through power purchase agreements with Southern California Edison, Shell Energy and aggregators.