Gresham House Energy Storage Fund, a UK fund investing in utility-scale battery energy storage systems, has agreed a new five year GBP180 million debt facility with a syndicate of banks including Commonwealth Bank of Australia, Lloyds Bank, NatWest and Santander.
The Facility comprises a GBP150 million capex term facility and a GBP30 million revolving working capital facility. The interest rate is 300bps over SONIA (before hedging). The capex facility also provides for an uncommitted accordion which could increase the total amount borrowed up to GBP380 million over time.
These proceeds will be used to fund the remainder of the Subsequent Pipeline which was announced in July. The Facility may also be used for other projects.
As part of the closing of this transaction, GRID shall repay the GBP8 million of outstanding Power Bond debt.
John Leggate, CBE, Chair of Gresham House Energy Storage Fund plc, says: “Achieving this benchmark transaction demonstrates the pace at which Britain’s energy storage market is maturing. Our ability to scale GRID’s operating portfolio to match the rapid growth in renewable power generation in the UK ensures that we remain at the forefront of the industry’s development and opportunities.
“With this facility, GRID is taking a measured approach to leverage and optimising the capital structure on attractive terms”.
Ben Guest, Lead Fund Manager and Managing Director of Gresham House New Energy, says: “We are delighted with the successful completion of this transaction, the terms achieved and the quality of the institutions that have taken part. Introducing a modest amount of cost-effective leverage to the portfolio has been an ambition since IPO. It allows us to significantly reduce both cash drag and our weighted average cost of capital, even at a relatively low leverage ratio of 25-30 per cent once fully drawn. It will also allow us to improve dividend cover for a given revenue level, which is a key goal for the Manager.
The Manager and Board would like to thank the Jefferies Debt Advisory Team very much for introducing this opportunity and for managing the transaction so smoothly on the Company’s behalf.”
