San José Clean Energy (SJCE) is proud to announce the signing of a $50 million credit facility established with Barclays Bank, a premier multinational bank and financial services company.
Benefits of the credit facility include increased flexibility in the use of borrowed funds, as well as lower overall costs of borrowing. Having cheaper, more readily available capital will allow SJCE to be nimbler and more financially secure in an ever-changing energy environment.
“With this credit contract, San José Clean Energy can more efficiently achieve our renewable energy procurement goals while passing on savings to customers and helping meet San José’s climate goals,” said Lori Mitchell, Community Energy Department Director.
A secure, flexible line of credit increases the operational efficiency of the Community Energy Department and provides the chance to pursue business interests that once were limited or unavailable due to lack of financing opportunities.
The contract highlights the fiscal strength and security of the City of San José and its newly-formed Community Energy Department. While having the backing of a large city government such as San José is a major benefit when negotiating credit terms, this credit facility was only achieved due to the confidence in the financial position of the Community Energy Department. This is because the debt is secured and repaid solely through the revenues generated through SJCE as opposed to the City’s general fund.
It also reveals a bright economic outlook for Community Choice Aggregations (CCAs). This announcement, in conjunction with Marin Clean Energy recently receiving an investment grade credit rating by Moody’s, emphasizes growing investor confidence in the CCA business model, in addition to creating more investment opportunities that may have once been limited due to financial insecurity and high costs of capital.