The team at Henry Ford Health (“HFH”), a leading integrated and academic healthcare system based in Detroit, have long talked about how the major expansion of their Detroit flagship hospital will be one of the largest fully electric-capable hospital facilities in the country. That dream took one more step towards reality on April 2,2024, with the closing of a first-of-its-kind $250 million Central Energy Hub financing. After an extensive process, HFH selected Henry Ford Health Energy Partners, a team made up of Kiewit, Veolia and Provident, to design, build, finance, operate and maintain this innovative project.
The Project. The Central Energy Hub, a key component of Henry Ford’s campus expansion, will provide heating and cooling via a hot and cold-water system that will tie into the new hospital facilities. The four-story30,000 square foot Project is part of the Henry Ford Health System’s Detroit South Campus Project, which is being developed by the Health System in conjunction with the $2.2 billion community development plan sponsored by, among others, the Health System. The new Detroit South Campus includes the to-be-constructed hospital, a shared services building, a parking facility, and the central utility plant, which supports Henry Ford Health's goal of achieving net zero by 2050.
The Financing. On April 2nd, Provident Group – HFH Energy LLC, the Special Purpose Entity formed to serve as Owner of the Project, closed on the issuance of $249.345 Million Act 38 Facilities Senior Revenue Bonds through the Michigan Finance Authority. The Bonds were designated as “Green Bonds” due to the use of proceeds for Energy Efficiency projects within the Green Bond Framework. Supported by availability payments from Henry Ford Health along with performance guarantees from Veolia, the Bonds achieved a rating of A3 from Moody’s. Sold by JPMorgan, as Underwriter, the Bonds were well-received, providing for an all-in cost of borrowing of 4.61%.
