Gresham House Energy Storage agrees five year debt facility after solid start to 2021 – Gresham House Energy Storage (GRID) has agreed a new five year £180m debt facility with a syndicate of banks including Commonwealth Bank of Australia, Lloyds Bank, NatWest and Santander.
The facility comprises a £150m capex term facility and a £30m revolving working capital facility, with an interest rate of 300bps over SONIA (before hedging). The capex facility also provides for an uncommitted accordion which could increase the total amount borrowed up to £380m over time.
The proceeds will be used to fund the remainder of the pipeline which was announced in July, and possibly other projects. GRID will also repay the £8m of outstanding power bond debt.
Manager, Ben Guest, said: ‘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% once fully drawn. It will also allow us to improve dividend cover for a given revenue level, which is a key goal.’
Half-year report
Meanwhile, the trust has also posted its half-year results for the six months to 30 June 2021. During the period under review, GRID delivered a NAV total return of 10% and a share price total return of 10.7%. EBITDA generated by the portfolio was £22.4m from operating revenues of £24.9m.
The company enjoyed dividend cover from underlying earnings of 1.38x and paid or declared dividends of 3.5p for the period as targeted, with 7p reaffirmed for 2021.
£280m has been raised in the year to date, comprising £100m in equity in July and the £180m, five-year, debt facility secured in September 2021.
Commenting on the results, John Leggate, chair of Gresham House Energy Storage, said: ‘As we approach the third anniversary of GRID’s IPO, we are proud of the Company’s and the Investment Manager’s collective achievements and ongoing ambitions. By 1Q 2023, our active portfolio is on track to have increased over 18 times since IPO, from 70MW to c1.3GW. In delivering this growth, the average project size in the portfolio has grown fourfold, from 14MW at IPO to the average 60MW projects we’re building today.
‘These market-leading achievements are the result of the team’s disciplined focus of delivering against our challenging targets, the huge support of our longstanding investors, and a favourable market backdrop. However, the scale of our ambitions and the industry’s growth, simply reflect the fundamental and urgent need for continued rapid deployment of large-scale battery storage systems.’
GRID : Gresham House Energy Storage agrees five year debt facility after solid start to 2021