Fermi Inc. (NASDAQ: FRMI) has signed a framework agreement with Hillcore Energy Capital Corporation under which Hillcore will finance, build, own, and operate a 2.6 gigawatt (GW) power complex at Fermi's Project Matador campus in Carson County, Texas.

Under the Build-Own-Operate-Transfer (BOOT) structure, Hillcore will develop the Hillcore Power Center at no upfront capital cost to Fermi. The facility will include approximately 2.5 GW of natural gas-fired generation built in phases, along with roughly 100 megawatts (MW) of solar generation and battery energy storage.

Construction of the first power block, approximately 350 MW, is set to begin upon execution of definitive agreements, with first power targeted within 24 months of a notice to proceed. The alliance is said to bring the Project Matador campus to approximately 4.8 GW of total on-site power capacity.

Fermi will purchase power only as customer leases are signed, with fuel costs passed through and construction, operating, and performance risk remaining with Hillcore. Fermi also holds an option to acquire the facility after 10 years at fair market value.

"Hillcore finances, builds, and operates the plant; Fermi delivers dedicated, behind-the-meter power matched to every tenant lease, with our balance sheet intact and a clear path to owning the asset," said Jacobo Ortiz, Fermi Co-President and Chief Operating Officer.

Hillcore Energy Capital Corporation is owned by Hillcore Group, a Canadian private investment firm with more than $6 billion in assets under management, and JV Driver Group, an industrial contractor. The parties are working to finalize constituent agreements and obtain customary approvals.

Project Matador is located on a site in the Texas Panhandle described as more than half the size of Manhattan, with over $1.5 billion invested to date. Fermi has stated the project is expected to ramp to approximately 17 GW, subject to binding customer agreements.