3 October 2024
EnergyPathways
plc
("EnergyPathways" or the
"Company")
£5.1 Million Green Loan
Facility
EnergyPathways plc (AIM: EPP), an
energy transition company developing low carbon integrated energy
solutions in the UK, is pleased to advise that it has entered into
a £5.1 million loan facility for its Marram Energy Storage Hub
("MESH") infrastructure project, a large-scale clean energy storage
facility. The loan facility is able to support the MESH project
through the FEED phase with a view to reaching FID at the end of
2025.
EnergyPathways has entered into a
binding loan facility ("Green Loan") with Global Green Asset
Financing Limited ("GGAF"). GGAF is a new, Luxembourg-based green
project and corporate financing platform structured to provide its
investors with green impact and yield income returns in sectors
including cleantech and renewable energy. Under the terms of the
Green Loan, EnergyPathways has entered into a loan facility of up
to £5.1 million with a minimum commitment from the lender of £2.55
million over the term. Drawdowns from the Green Loan will be
subject to GGAF raising further capital which is currently
underway. Drawdowns must commence during Q4 2024, and will be
phased in line with EnergyPathways' planned use of funds on the
MESH project to develop a fully decarbonised integrated natural gas
and green hydrogen energy storage facility. GGAF plans to fund the
Green Loan through an issue of 5-year interest bearing notes due
2029 (the "C3 Notes") and it has commenced the initial placing of
the C3 Notes with international investors. GGAF has agreed to
prioritise any distributions requested under EnergyPathways' Green
Loan as the C3 Notes are issued.
Green Loan Facility
The Green Loan has a 3 year term
with the principal amount repayable on the maturity date. Interest
is charged on drawn down amounts at a fixed rate of 12.5% per annum
and is payable monthly. The terms of the Green Loan provide for
early repayment, including accrued interest, without premium or
penalty. Warrant rights are to be issued to GGAF pro-rata on
drawdowns, with the number of warrants calculated as the GBP value
of each drawdown divided by the exercise price. The warrants will
be exercisable from the maturity date for a term of one year. Their
exercise price will be equal to the 30 day VWAP share price at the
maturity date less a 20% discount. Drawdown debt is secured via a
fixed charge over any Company tangible or intangible asset financed
by the loan, plus a fixed charge over all of its shares in any
subsidiaries at the date of execution including EnergyPathways
Irish Sea Limited and EnergyPathways UK Holdings Limited. A
placement fee of 2% will be payable to Jexium Ltd, as originators,
on drawdowns.
The Green Loan facility will give
EnergyPathways financial flexibility, enabling it to access debt
with minimal shareholder dilution in the critical pre-development
stage and allowing the principal loan amount to be potentially
repaid from future MESH revenues. The facility can also sit
alongside and complement other infrastructure and cleantech
financing arrangements being evaluated by the Company for the MESH
development.
About MESH
The MESH natural gas and green
hydrogen storage facility, located off the UK's Lancashire coast,
will be equivalent in size to the Rough facility, currently the
UK's largest gas storage facility. It will have a storage capacity
of ~15TWh (~500 million therms or ~50 billion cubic feet of gas).
EnergyPathways has further identified growth upside and plans to
expand the MESH storage capacity by as much as three times,
including developing upscaled green hydrogen storage
capacity.
EnergyPathways is forming a
stakeholder partner group for the MESH integrated energy project
comprising several global leading Tier-One engineering and energy
companies. It plans to complete pre-FEED by the end of 2024 and FID
at the end of 2025.
Commenting on the update, Ben Clube, CEO of EnergyPathways,
said:
"We are very pleased to have secured this green loan facility
with GGAF, CSM Securities and Jexium Ltd - innovators in cleantech
and renewable energy financing.
"To be selected for inclusion in the GGAF investment portfolio
validates EnergyPathways as a low emission energy transition
company. The Green Loan will provide a funding facility to progress
the MESH project through the FEED phase with a view to reaching FID
at the end of 2025. It will also position EnergyPathways to build
on its leading position in the rapidly growing multi-billion pound
energy storage sector in the UK.
"This transaction demonstrates the strong investment appeal of
EnergyPathways' MESH project as a cleantech integrated energy
infrastructure solution able to deliver reliable and decarbonised
energy supply to the UK and its potential to deliver high yield
infrastructure returns to investors over the project's 20 year
life.
"EnergyPathways has received a number of offers of financing,
confirming the Company's view that its business model is well
positioned to attract investment capital. The Green Loan facility,
which offers good flexibility as well as access to minimally
dilutive funding, demonstrates EnergyPathways' commitment to
financial discipline and delivering long-term shareholder value.
EnergyPathways remains focused on developing additional cleantech
and infrastructure financing solutions for the development of the
MESH project."
Commenting on the
facility, Joe Lufkin, Group Managing
Director of Jexium Ltd and GGAF
said:
"We are excited to be part of EnergyPathways' MESH and
Marram projects, to be able to include these top-quality
assets in the GGAF
portfolio, and to provide financing support for such a strategic
component of the UK's national energy
transition."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (which forms part of
domestic UK law pursuant to the European Union
(Withdrawal) Act 2018).
Enquiries:
|
|
EnergyPathways
Ben Clube / Ben Hodges
|
Tel: +44 (0)207 466 5000, c/o
Buchanan (Financial PR)
Email :
info@energypathways.uk
|
Cairn Financial Advisers LLP (Nominated
Adviser) Jo Turner / Louise
O'Driscoll / Sandy Jamieson
|
Tel: +44 (0)20 7213 0880
|
SP
Angel Corporate Finance LLP (Broker)
Richard Hail / Adam
Cowl
|
Tel: +44 (0)20 3470 0470
|
Global Investment Strategy UK Limited (Joint
Broker) Callum Hill / James
Sheehan
|
Tel: +44 (0)20 7048 9000
|
Buchanan (Financial PR) Ben
Romney / Barry Archer
|
Tel: +44 (0)207 466 5000
Email: energy@buchanan.uk.com
|
EnergyPathways Investor Website
Visit the website for further
information or sign up to the hub to receive news and engage with
the management team.
|
energypathways.uk
|
X (formerly Twitter)
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@energy_pathways
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About Global Green Asset Financing
GGAF is a new, innovative,
Anglo-Luxembourg green project and corporate financing platform of
€450 million announced in July 2024. It is managed by CSM
Securities Sàrl, a Luxembourg securitisation firm, and Jexium Ltd,
a UK-based green finance adviser and originator. It is structured
to provide investors with green impact and yield income
returns.
The management team of GGAF, CSM
Securities Sàrl and Jexium Ltd have extensive investment industry
experience and a successful track record over the past 4 decades,
previously creating more than a dozen funds, facilities and
securitisation vehicles with total assets of more than €4.0 billion
(£3.4 billion).
The new GGAF vehicle has
successfully assembled a diversified and growing portfolio of
cleantech and renewable energy asset and project finance
transactions currently across 16 countries and totalling over €230
million (£197 million), including EnergyPathways' Green
Loan.
Forward Looking Statements
This announcement contains
forward-looking statements relating to expected or anticipated
future events and anticipated results that are forward-looking in
nature and, as a result, are subject to certain risks and
uncertainties, such as general economic, market and business
conditions, competition for qualified staff, the regulatory process
and actions, technical issues, new legislation, uncertainties
resulting from potential delays or changes in plans, uncertainties
resulting from working in a new political jurisdiction,
uncertainties regarding the results of exploration, uncertainties
regarding the timing and granting of prospecting rights,
uncertainties regarding the timing and granting of regulatory and
other third party consents and approvals, uncertainties regarding
the Company's or any third party's ability to execute and implement
future plans, and the occurrence of unexpected
events.
Actual results achieved may vary
from the information provided herein as a result of numerous known
and unknown risks and uncertainties and other factors.