Eos Energy and Cerberus to capitalize Frontier Power USA

Eos Energy (EOSE) Enterprises and Cerberus Capital Management, one of the country’s largest alternative investment firms, announced the intention to capitalize Frontier Power USA, an independent development and investment company established to build, own, and operate a diversified portfolio of long-duration battery energy storage projects deploying Eos’ proprietary zinc bromide based Z3 technology with the strategy of becoming an Independent Power Producer, or IPP. Frontier Power USA is expected to unify three core capabilities that have historically sat across multiple stakeholders: Eos’ vertically integrated technology stack, Cerberus’s institutional capital and operating experience, and a performance wrap to be provided by Ariel Green, which underwrites Z3 performance. This combination is designed to compress the project lifecycle from commitment to first energy cycle and convert Eos’ opportunity pipeline or projects with secured interconnection and offtake into funded, under construction assets. Eos and Frontier Power USA entered into a firm 2 GWh capacity reservation agreement, expanding Eos’ March 31 backlog. Frontier Power USA is expected to deploy this capacity across commercial and industrial applications, AI data centers, and utility-scale projects, drawing from a multi GWh project pipeline which is under active development. Simplifying project bankability and accelerating asset deployment, Frontier Power USA has secured a firm Technology Performance Insurance framework with Ariel Green, a division of Ariel Re and a leader in clean energy insurance. The framework contemplates a 15-year non-cancellable coverage, which will be sized at the project level with a multi-year total policy capacity of up to approximately $1.5B, written through highly rated insurance markets including syndicates at a Lloyd’s of London consortium. Cerberus Capital Management is anchoring Frontier Power USA with a $100M equity commitment and is concurrently extending its existing Eos lock-up through year end 2026; Cerberus is expected to receive Eos warrants, as well as controlling equity in Frontier Power USA in exchange for its commitment. The funding of Cerberus’s equity commitment is subject to certain closing conditions. As a standalone entity, Frontier Power USA will separate project-level capital from the Eos corporate balance sheet, allowing Eos to focus on technology development, manufacturing, and project execution. Frontier Power USA is expected to be led by a CEO with a deep operating track record in energy storage development and project finance, supported by a dedicated origination and structuring team. To fund its equity contribution in Frontier Power USA, Eos intends to launch a rights offering targeting approximately $150M. In the rights offering, existing Eos common shareholders, including retail investors, would receive a distribution of subscription rights to purchase Eos securities along with receiving expected warrants.