Retail Supplier Affiliate Secures $175 Million Of Capital From PE Firm For Bitcoin Mining, Data Center Venture

September 21, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Talen Energy Corporation ("Talen") and its wholly-owned subsidiary Cumulus Growth Holdings LLC ("Cumulus Growth") announced today that, "they have taken additional steps forward in capitalizing and executing Talen's strategic transformation to a renewable energy and digital infrastructure growth platform."

Specifically, Cumulus Growth, through its wholly-owned subsidiary Cumulus Digital LLC ("Cumulus Digital"), has secured a 6-year, up to $175 million strategic capital partnership (the "Investment") with Orion Energy Partners ("Orion").

"The Investment from Orion will be used to fund common infrastructure for the Cumulus hyperscale data center campus located adjacent to Talen's 2.5 Gigawatt Susquehanna carbon-free nuclear plant, as well as to fund Talen's previously-announced bitcoin mining joint venture with TeraWulf, known as Nautilus Cryptomine. Up to $125 million of the Orion capital will be available following closing and an additional $50 million will be available once agreed milestones have been satisfied. In addition, Orion will receive a non-voting equity interest in Cumulus Digital Holdings LLC ('Digital Holdings'), the parent of Cumulus Digital. The Investment will be secured by a pledge of substantially all of the assets of Digital Holdings and its subsidiaries," Talen said

Concurrent with the Investment, subsidiaries of Talen Energy Supply LLC ("TES") sold the equity interests of certain clean energy project development entities (holding primarily: data center, renewables, and battery storage assets) and certain undeveloped land to Cumulus Growth, in return for voting convertible preferred equity interests in subsidiaries of Cumulus Growth. Post-closing, Talen will own common equity in Cumulus Growth and its subsidiaries and TES, and certain of its subsidiaries, will own voting convertible preferred equity in certain Cumulus Growth subsidiaries, which provide TES with equity participation in Talen's clean energy and digital infrastructure transformation.

Alex Hernandez, CEO of Cumulus Growth and President of Talen noted that, "We have broken ground on the Cumulus data center campus, which will provide carbon-free energy generated by Susquehanna's dual units to power the campus, including up to 475 Megawatts for hyperscale data center clients and 300 Megawatts for coin mining and other blockchain applications."

"The first two Cumulus data centers, one for hyperscale cloud and another for coin applications, are expected to be completed by the second half of 2022," said Hernandez.

Additionally, Cumulus Growth is expected to offer customers the ability to supplement its giga-scale carbon-free offering with 400 Megawatts of new solar generation capacity under development in Pennsylvania

Following the Investment and initial capitalization of Cumulus Digital, Talen and Cumulus Growth intend to raise incremental growth equity in the near-term for further data center, coin, storage and renewables growth projects.

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