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Downing Renewables and Infrastructure enters into new loan agreements

Downing Renewables and Infrastructure Trust (DORE) has announced that it has entered into two separate loan facility agreements: a £25 million Revolving Credit Facility (RCF) with Santander UK plc and a seven-year EUR 43.5 million debt facility with Skandinaviska Enskilda Banken AB (SEB) for its Swedish hydro assets. Both of these loan agreements have been entered into via wholly owned subsidiaries,

The £25m revolving credit facility

DORE Hold Co Limited has entered into loan agreement for a £25 million RCF with Santander UK plc. The RCF has a four-year term, with the possibility to be extended for a further year, and also includes an uncommitted accordion facility, allowing for an increase in its size which DORE says is to further assist its expected increase in investment activity (DORE says that the RCF will take a central role in its upcoming investment activity). The RCF can be drawn in GBP and EUR (with DORE also able to make use of funds in other currencies) and is priced at the Sterling Overnight Index Average (SONIA) plus 2.25%. DORE says that it will use the RCF mainly to fund the acquisition of additional assets and to meet capital expenditure requirements or equity funding commitments in respect of assets.

Hydro asset refinancing

DORE initially acquired Downing Hydro AB (DHAB), its Swedish hydropower portfolio, on an unlevered basis shortly after DORE’s IPO in December 2020. However, DORE says that, in light of the strong transaction pipeline and ongoing capital expenditure requirements, DHAB has entered into a seven-year EUR 43.5 million debt facility with SEB. DORE expects to make its initial drawdowns under the facility in the near term to fund bolt-on acquisitions of various hydropower portfolios in Sweden.

Comments from Tom Williams, Partner, Head of Energy and Infrastructure at Downing LLP

“We are pleased to expand our relationship with both Santander in the UK and SEB in Sweden. We’re also delighted with the flexibility of both facilities which will accelerate the growth of the Company.  We anticipate initial drawdowns under the facilities in the near term to fund acquisitions.”

Comments from Ioana Bozan, Director, Specialised & Project Finance, Santander

“We are delighted to have closed this bespoke debt facility and cement our relationship with Downing. The RCF represents a landmark transaction, demonstrating Santander UK’s capabilities in the net asset value (NAV) lending space and as a leading lender for Renewable Energy, while enabling Downing to continue to grow the business and deliver on their strategy. It has been a pleasure for us to work with Downing’s established and ambitious management team to deliver a flexible funding solution and unlock growth opportunities.

“Santander’s deal team, including Rakesh Ramana, Relationship Director in the specialist Energy and Sustainability team are looking forward to developing further the relationship with Downing on future projects and positively contributing to the wider climate change agenda.”

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