Gresham House Energy Storage Fund has agreed a £220 million refinancing package aimed at reducing borrowing costs and freeing up capital to support the fund’s portfolio expansion and energy storage upgrade plans.
The new seven-year debt facility carries a margin of 225 basis points over SONIA, compared with the 300 basis points applied to the existing loan, the company said in a statement on Monday.
The facility will replace £195 million in existing arrangements due to mature in 2028, of which £160 million had been drawn. Additional elements include an £18.6 million debt service reserve and a £1.6 million VAT facility to support working capital.
The fund said the refinancing improves its capital structure while maintaining conservative leverage. Net debt to gross asset value (GAV) is expected to remain below 30%, and gross debt to net asset value (NAV) under 40% — both well within the company’s stated 50% policy limit.
“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,” said Chair John Leggate.
Gresham House said it expects contracted cashflows from tolling arrangements, capacity market agreements and recently secured long-term price floors on 88% of its portfolio to fully cover operating costs, interest payments, and debt repayments throughout the loan term.
With the improved capital position, the fund plans to enhance its 282 megawatts (MW) of operational storage projects by extending their duration to two hours or more, which would add around 350 megawatt-hours (MWh) of capacity. It also intends to acquire rights to 694MW of fully consented energy storage projects, pending due diligence.
These include the Ocker Hill (240MW), Cockenzie A (240MW), Elland 2 (100MW), Monet’s Garden (57MW), and Lister Drive (57MW) sites, all of which are awaiting protected status confirmation in the National Electricity System Operator (NESO) connection queue.
Fund manager Ben Guest said the refinancing will enable Gresham House “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%”.
The company said it will outline a revised capital allocation policy alongside its interim results due in September.
