USA, California:

Default on Coso Geothermal's Debt Service Facility (Project Finance Magazine)

Coso Junction

CoBank, part of the United States Farm Credit System, has issued an event of default letter under the $40 million debt service reserve letter of credit it provides to Terra-Gen's Coso Geothermal power (CGP) portfolio.

CGP is a special-purpose company formed to lease and operate the Coso project, which consists of three interlinked geothermal power plants located in Inyo County, CA. Coso provides royalty payments to the U.S. Navy and the Bureau of Land Management for use of the geothermal resource. Under a series of power purchase agreements, Coso's entire output will be sold to SCE through January 2030. Cash flows from both Coso and Beowawe, an affiliated geothermal project in Nevada, are available to service CGP's rent payments under the CGP lease. Rent payments are the sole source of cash available to pay debt service on the pass-through trust certificates.