Zenobē secures up to £20m of contracted receivables funding from NatWest
Zenobē Energy, one of the UK’s largest independent owners and operators of battery storage, has secured up to £20m of contracted receivables funding from NatWest Specialist Structured Finance, to support the continued growth of the company in the EV sector. This follows on from last year’s successful raise of £35m of equity from JERA Co. Inc. and TEPCO Power Grid Inc. and the arrangement of the first non-recourse debt facility from a high street bank secured against battery storage projects that trade predominately on a merchant basis.
Zenobē is a UK market leader in battery storage, with 73MW of operational grid-scale battery capacity. The company focusses on the innovative use of storage, investing in bespoke software to optimise the monitoring, utilisation and dispatch of its batteries. It was the first battery owner to develop software to enter the Fast Response and Reactive Power markets and recently won a contract with National Grid ESO to provide reactive power on the transmission network utilising battery technology – a world first.
Zenobē applies the expertise gained through its grid-scale battery operations combined with its financing capabilities to provide fully funded services to transportation and other customers turning their clean energy ambitions into a reality, while reducing costs, increasing flexibility and improving the resilience of their power supply. Its proprietary grid-scale battery software has been further developed to optimise bus charging costs, battery warranties, and generate new revenue opportunities, as well as support telematics for the vehicles themselves.
This NatWest funding is the first financing arrangement to support electric bus and charging infrastructure provided under service contracts to bus operators. NatWest provides funding which is secured against the cashflows generated by Zenobē’s contracts with the operators to provide charging infrastructure and EV bus managed services. Combined with Zenobē’s technical expertise, this NatWest funding enables the company to offer competitively priced end-to-end services to the bus operators including the design, installation, financing and operation of electrical charging infrastructure in the depot, the financing and optional replacement of the battery in the bus and the financing of the non-battery components of the bus (‘the chassis’).
Zenobē’s innovative solutions for the bus sector are enabling the faster take up of EV buses in the UK, helping to meet legally binding climate change targets and improve air quality across the country. These services will be particularly important as the UK comes out of lockdown and bus operations return to normal with an emphasis on the adoption of zero emission vehicles. Zenobē’s services work alongside the government’s Ultra-Low Emission Bus (ULEB) grant offering for transport operators as a match funder which enables the available grant finance to support the financing and deployment of more buses than can be achieved without this service offering. The NatWest funding will support the financing and further deployment of EV fleets across the country.
The funding was led by Nicholas Beatty and managed by Bradley Fox at Zenobē and led by Piers Johnson at NatWest. Legal advice was provided to Zenobē by Lisa Marks of Stephenson Harwood. NatWest was advised by Andrew Maskell of Addleshaw Goddard.
Nicholas Beatty, founder director, Zenobē Energy, said: “This facility with NatWest demonstrates Zenobē’s continuing leadership in the battery sector with its focus on innovation and provision of solutions to customers which combine the company’s technology, operational and financing capabilities. This funding will be crucial in allowing us to achieve our growth ambitions and support our fast developing EV fleet businesses as our clients adopt zero emission fleets both in the EV bus sector and the wider EV fleet market”.
Piers Johnson, head of corporates, specialist asset finance said: “We are very pleased to be supporting Zenobē Energy by providing funding that will help to increase the use of electric vehicles and create a greener transport system for all. We have set out an ambition to play a leading role in helping to address the climate challenge and this deal is a clear demonstration of how we are supporting the transition to a low carbon economy.”
Lisa Marks, partner, Stephenson Harwood said: “We were really pleased to advise Zenobē – one of our key clients – on this innovative and strategically significant funding. With the changing legislative landscape, where electric busses now form a core part of the country’s environmental efforts, investing in green technologies is more important than ever. Having previously advised Zenobē in relation to its bus operator contracts for battery and charging services, and the provision of bus chassis, it was particularly satisfying to have been able to support them in realising this novel and complex funding arrangement. We look forward to continuing to support them as they realise their long-term strategic priorities.”
Andrew Maskill, head of asset finance said: “We were delighted to work with Zenobē Energy, their lawyers and our client Natwest on this project. We all worked closely as a team to create an innovative structured receivables based product which will hopefully assist Zenobē roll out their Bus battery product in the UK. We look forward to working with them and their team again in the future.
