Gresham House Energy Storage Fund has signed a £220m refinancing deal to reduce debt costs and release capital for its growth plans.
The new facility, with a seven-year maturity, carries a 225bp margin over SONIA compared with 300bp under the existing loan, according to Gresham House.
It will replace £195m in facilities maturing in 2028, of which £160m has been drawn. A £18.6m debt service reserve and £1.6m VAT facility have also been added to support working capital.
Gresham House said contracted cashflows from tolls, capacity market deals and recently secured long-term floors on 88% of the portfolio will fully cover operating costs, interest and repayments during the loan term.
The refinancing is expected to keep net debt to GAV below 30% and gross debt to NAV under 40%, well below the company’s 50% policy limit.
The fund plans to use the improved capital position to augment 282MW of operational projects to two-hour or longer duration, adding 350MW, and to acquire rights to 694MW of new fully consented projects once due diligence is complete.
These include the 240MW Ocker Hill, 240MW Cockenzie A, 100MW Elland 2, 57MW Monet’s Garden and 57MW Lister Drive projects, all awaiting confirmation of protected status in the NESO connection queue.
Chair John Leggate said: “Today’s achievement gives the company a much stronger capital structure, setting the foundation for us to pursue our growth agenda as the sector sees significant growth over the coming decade.”
He added that Gresham House will announce a revised capital allocation policy alongside interim results in September.
Fund manager Ben Guest (pictured) said the refinancing enables the company to “execute on our exciting growth plans: augmenting the existing portfolio to two hours and acquiring the project rights to grow megawatt capacity by c.70%”.