REG - EnergyPathways PLC - £5.1 million Green Loan Facility

EnergypathwaysAnnouncement

03/10/2024 07:15

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RNS Number : 8022G  EnergyPathways PLC  03 October 2024

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                                        Tel: +44 (0)207 466 5000, c/o Buchanan (Financial PR)

Ben Clube / Ben Hodges

                                                     Email : info@energypathways.uk

 Cairn Financial Advisers LLP (Nominated Adviser)      Tel: +44 (0)20 7213 0880
 Jo Turner / Louise O'Driscoll / Sandy Jamieson
 SP Angel Corporate Finance LLP (Broker)               Tel: +44 (0)20 3470 0470

 Richard Hail / Adam Cowl
 Global Investment Strategy UK Limited (Joint Broker)  Tel: +44 (0)20 7048 9000
 Callum Hill / James Sheehan
 Buchanan (Financial PR)                               Tel: +44 (0)207 466 5000
 Ben Romney / Barry Archer
Email: energy@buchanan.uk.com (mailto:energy@buchanan.uk.com)

 

 

 EnergyPathways Investor Website

 Visit the website for further information or sign up to the hub to receive   energypathways.uk
 news and engage with the management team.
 X (formerly Twitter)                                                         @energy_pathways

 

 

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.

 

 

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