UK-based renewables fund manager Glennmont Partners has sealed a £150 million ($193.3 million; €164.5 million) refinancing deal for a biomass plant backed by a single European institutional investor.
The capital will be used to refinance the 40MW Sleaford biomass plant acquired by the firm’s €437 million debut clean energy fund in 2011 for about £170 million. The project, operating since 2014, benefits from the UK’s renewable energy subsidy system and provides heat under long-term offtake contracts.
Glennmont said it is the “largest institutional-only financing in the UK biomass sector” to date. The manager declined to disclose the identity of the lender, but told Infrastructure Investor it was a platform consisting largely of commitments from pension funds and insurance companies in Spain, France and Germany. Deutsche Bank acted as the sole lead arranger on the deal.
“This transaction further highlights that biomass is a highly efficient renewable energy technology capable of attracting significant amounts of long-term, competitive institutional capital,” said Joost Bergsma, chief executive of Glennmont. “The energy market is as diverse as it has ever been, with new technologies and new market structures offering investors a wide range of opportunities to invest in clean energy.”
The asset manager said the refinancing is “part of a programme of realisations of value from the fund”. Peter Dickson, partner at Glennmont, said it is not currently looking to divest the fund’s assets, but is seeking to optimise the value of the projects. The company’s Clean Energy Fund launched in September 2009 with investors including BNP Paribas, the bank from which it spun out two years earlier. It reached a final close in 2010 after making 14 investments.
The firm closed its second fund on €500 million in 2014 and is now in the early stages of fundraising for its third vehicle. A €100 million commitment by the European Investment Bank was approved last month. Shortly after the approval, Glennmont completed the acquisition of a 10MW operating wind farm in Italy, where it now owns more than 345MW of wind assets.