Akeida Capital Management, LLC, an environmental asset management firm focused on originating and investing in projects aimed at combating climate change, has announced it has closed on senior secured financing for two biomass power generation facilities located in the San Joaquin Valley in California. The facilities, in Merced and Chowchilla, California, each have a capacity of 12.5-megawatts.

David Kandolha, principal at Akeida Capital said, "The environmental benefits provided by these plants and the unique challenges of this transaction made it critical for us, working with our partners, to come up with a flexible financing package in order to provide the capital necessary to allow these plants to operate at their full capacity for the foreseeable future."

Akeida provided a $12.5 million senior secured loan facility to fund working capital for both the Merced and Chowchilla plants. Previous construction financing for the refurbishment of the facilities was completed in 2008. The two plants, owned by Global Ampersand, LLC and its affiliates, have entered into 15-year power purchase agreements to sell electricity to California's Pacific Gas and Electric Company, qualifying them for state tax credits. Global Ampersand's Chief Operating Officer, Eric Shumway said, "Closing on this loan facility will allow our project team finally to focus on getting the most out of our plants, rather than on searching for working capital in a tight lending environment."

The Akeida Capital transaction comes as large electric utilities such as Southern Co. and Progress Energy have made multi-million dollar investments in biomass power plants. Driven by federal and state incentives and a proposed House bill that would require electric utilities to generate 20% of their power from renewable sources by 2020, companies are looking to build these facilities which make use of an abundant supply of plants, wood chips and other organic material. Biomass is expected to generate 4.5% of the electricity consumed in the United States by 2030, outpacing both wind and solar power. Currently, the commercial biomass power generating industry in the United States produces about 0.5 percent of the U.S. electricity supply.