London Stock Exchange-listed Gore Street Energy Storage Fund (GSF) has secured a US$80 million increase in debt facilities for its battery storage projects.
The fund, overseen by renewable energy equity investor Gore Street Capital, has upsized two existing facilities with lenders First Citizens Bank and Banco Santander, it said in a regulatory news service (RNS) announcement on Friday (15 November).
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The transaction with First Citizens covers GSF’s first project in California, US, which it acquired from developer Avantus in February 2023. Called Big Rock, and owned by a GSF subsidiary, the investor closed a US$60 million project finance facility with First Citizens in October 2023.
GSF said the project finance facility has now been upsized to US$90 million, after its subsidiary, Big Rock ESS Assets LLC, completed the loan conversion process based on the successful execution of project milestones.
Last month, Energy-Storage.news reported that GSF signed a resource adequacy (RA) contract for Big Rock with J. Aron & Company LLC, itself a subsidiary of Goldman Sachs.
The 12-year deal is ‘stackable’ and will be worth more than US$14 million annually when it starts up next year and the asset enters the CAISO market, the investor said.
LS Energy Solution has been selected as BESS system integrator and supplier to the project. At last year’s RE+ clean energy trade show in Las Vegas, US, the integrator took along one of the containerised BESS units—minus the battery modules for safety reasons—to put on show.
Big Rock and a first project in Texas’ ERCOT market have been highlighted by the fund as part of an international diversification strategy that has seen Gore Street weather a period of low revenues for battery storage in the UK over the past year or so.
GSF said last week that the RA contract will account for around 40% of the project’s revenues, while it also expects to avail of a 30% investment tax credit (ITC) incentive for eligible project costs unlocked by the Biden-Harris Administration’s Inflation Reduction Act (IRA).
US$100 million Santander revolving credit facility
The investment fund’s revolving credit facility with Spain’s Banco Santander meanwhile has been upsized for a second time.
It agreed to an initial US$15 million borrowing for the facility, which extends to 2027, before upping it to US$50 million in June 2023 after agreeing to add incremental debt with Santander and its UK subsidiary.
The credit facility now stands at US$100 million after the latest increase. GSF said the facility is priced at 300 points above SONIA interest rate benchmarking, but will go up to 350 basis points subject to the prevailing debt to gross asset value (GAV) ratio.
The credit facility’s term has also been extended out to 2028. Gore Street said the financing will help the fund finalise the buildout of in-construction assets in a flexible way, including potential increases to energy storage duration or the buildout of additional capacity from its development pipeline.
“I am pleased to announce the availability of these two upsized facilities to the Company. This ensures enhanced liquidity and the ability to continue to further scale the Company,” Alex O’Cinneide, Gore Street Capital CEO and founder said.
“We will continue our prudent approach and, despite the availability of these facilities, will ensure the appropriate consideration is given before any drawings are made.”
O’Cinneide was the winner of the Outstanding Contribution Award at last year’s Energy Storage Awards, hosted by our publisher Solar Media. The ceremony for the 2024 edition of the awards, which are for the European energy storage industry, will be held this Thursday, 21 November, in London.
