Clean Energy Fuels Corp. announced that it has entered into a six-year $300 million senior secured term loan with Stonepeak, a leading alternative investment firm specializing in infrastructure and real assets. The credit agreement also provides for a two-year delayed draw term loan commitment of an additional $100 million.

In addition to repaying existing loans, the financing from Stonepeak will provide Clean Energy with capital for new renewable natural gas production facilities, as well as the expansion of the company?s fueling infrastructure targeting the heavy-duty truck market. Clean Energy currently provides RNG to hundreds of fleets every day in the form of compressed natural gas and liquified natural gas, which enables them to decarbonize their large vehicles easily and affordably. Clean Energy is currently developing a portfolio of RNG production facilities at dairies across the country.

The first project is producing RNG in Texas and supplying it to the transportation market in Oregon through the state?s low carbon fuels program. Multiple other facilities are in the final stages of completion. The company is also expanding its RNG fueling infrastructure, which currently includes over 600 stations across North America.

This comes at a time when Cummins Inc. is testing a new larger natural gas engine for heavy-duty trucks with companies like Walmart, Werner, Knight Swift, and UPS. These fleets are experiencing an improved fuel economy with more torque and power than previous models, while at the same time dramatically reducing greenhouse gas and NOx emissions compared to diesel. The 2024 commercial launch of the Cummins X15N engine is much anticipated by the industry.

RNG is a biogenic fuel made entirely from organic waste at facilities like dairy farms. Agriculture accounts for over 10% of U.S. GHG emissions and the transportation sector accounts for another 28%, according to the U.S. Environmental Protection Agency. Capturing methane from farm waste lowers these emissions. RNG, produced by that captured methane and used as a transportation fuel, significantly lowers GHG emissions on a lifecycle basis when compared to diesel.

This allows RNG to be one of the only transportation fuels to receive a negative carbon-intensity score by the California Air Resources Board based on the reduction of emissions at the source and at the vehicle. The term loan bears interest at 9.5% per annum. During the first two years, Clean Energy may elect to pay up to 75% of the interest in kind.

The term loan matures on December 12, 2029 and may be repaid by Clean Energy at any time in an amount that results in Stonepeak achieving the greater of 11.5% internal rate of return and 1.4x multiple on invested capital, subject to certain exceptions. In connection with this transaction, Clean Energy issued warrants to Stonepeak for the purchase of 10 million shares of common stock with an exercise price of $5.50 per share and 10 million shares of common stock with an exercise price of $6.50 per share. The warrants expire on June 15, 2032 and are exercisable at any time after December 12, 2025.