Geothermal energy project developer Fervo Energy announced that it has secured $255 million in funding, including a $135 million corporate equity round, and $120 million in debt capital.

Founded in 2017, Houston Texas-based Fervo Energy focuses on the development of geothermal projects to deliver carbon-free energy. The company uses techniques such as horizontal drilling and distributed fiber optic sensing to make reservoirs of hot rock that exist beneath the earth’s surface into clean energy sources.

Fervo is currently developing Cape Station, its first greenfield development, in Beaver County, Utah, which was approved in October by the U.S. Bureau of Land Management to generate up to 2 GW of baseload power. The Cape Station project produces energy by injecting water into hot subsurface rock formations, extracting the heated water, and using it to generate electricity. The project is expected to begin generating electricity in its first phase in 2026, providing the grid with 24/7 carbon-free energy.

Fervo CEO and Co-Founder Tim Latimer, said:

“The demand for 24/7 carbon-free energy is at an all-time high, and Fervo is one of the only companies building large projects that will come online before the end of the decade. Investors recognize that Fervo’s ability to get to scale quickly is vital in an evolving market that is seeing unprecedented energy demand from AI and other sources.”

The equity round was led by Capricorn’s Technology Impact Fund II, and included participation from Breakthrough Energy Ventures, CalSTRS, Congruent Ventures, CPP Investments, DCVC, Devon Energy, Galvanize Climate Solutions, Liberty Mutual Investments, Mercuria, and Sabanci Climate Ventures.

The debt capital, including a letter of credit and term loan facility, was provided by energy and commodity group Mercuria, in order to provide liquidity to support the acceleration of the deployment of enhanced geothermal systems (EGS) projects across the U.S., in response to growing demand for clean energy, Fervo said.

Brian Falik, Group Chief Investment Officer of Mercuria, said:

“In surveying power markets across the U.S. today, the need for next-generation geothermal is undeniable. We believe in Fervo not just because their EGS approach is cost-effective, commercially viable, and already being deployed at scale, but because they set ambitious targets and consistently deliver.”

The announcement follows a $244 million funding round by Fervo earlier this year, and a $138 million financing in 2022.