Gore Street Energy Storage Fund PLC notes growth milestones in portfolio as it secures new financing
The company said that two Northern Ireland sites, Mullavilly and Drumkee, are now complete and generating revenue, adding that it has also secured a £15mln revolving credit facility to support its continued growth
In an update, the group said its two Northern Ireland sites, Mullavilly and Drumkee, are now complete and generating revenue. Despite Coronavirus (COVID-19), the company said the two 50MW projects were completed on budget and in time to capture the earliest possible window to start earning revenues under the Northern Ireland DS3 contracts.
Gore Street said the new sites almost double its operational portfolio, which now comprises 210MW across 11 projects in Great Britain and Ireland and is expected to double operating cash flow.
The firm added that the DS3 contracts available for these two assets have attractive return profiles, likely to be “considerably higher” than its 10% internal rate of return (IRR) target for portfolio assets.
Meanwhile, Gore Street said its Porterstown project in the Republic of Ireland (ROI) has recently successfully contracted Fluence for a fully wrapped construction of the battery system and has secured an option to expand its capacity from 30MW to 90MW. Following an update from Eirgrid, phase one is now expected to be commissioned in the first quarter of 2022 with phase two to follow in due course.
In line with this expansion, the company said that Kilmannock, its other ROI asset in construction, has an equally significant expansion proposal, from 30MW to a potential 90MW, which is currently going through an application process. Gore Street said it is engaging with stakeholders to secure a streamlined construction schedule with a definitive connection date to be confirmed.
The firm also said that its pipeline of new investment opportunities continues to grow and now amounts to 1.3 gigawatts in the UK and internationally, and as a result, it is considering utilising its placing programme to capitalise on these opportunities. The group said it has also secured a £15mln revolving credit facility (RCF) with Santander to support its continued growth and finance the construction of existing projects and purchase new grid-scale battery storage projects from its pipeline.
“We are particularly pleased with the progress at our NI assets; these are now the largest of their kind operating on the Northern Irish grid and Gore Street is one of the few site owners to successfully secure lucrative DS3 contracts. This is recognised as one of the world’s most advanced grid balancing contracts and we are delighted to have attained a leading role in the service through a competitive auction. The fact that Gore Street’s NI assets are two of the few assets to have secured the 1 April 2021 gate clearly demonstrates Gore Street Capital’s expertise in delivering for our shareholders in this rapidly maturing asset class, where proven experience is instrumental for optimising performance. With the additional operational cashflow from this 100MW, Gore Street reiterates its earnings expectation to more than double its expected consolidated operational cash flow”, said Alex O’Cinneide, chief executive of the company’s investment adviser Gore Street Capital.
“The £15mln facility RCF from Santander demonstrates a further recognition of the Company’s continuing leadership in the asset class and the increasing maturity of the energy storage sector. It will support our growth ambitions and will be used to optimise the capital structure of the company. The increasingly attractive capacity auctions in which the Company can play a leading role, reflect the ongoing placement of investment in the sector as a key priority for national infrastructure. Gore Street is ideally positioned to capitalise on this ongoing critical energy transition and is delighted to be contributing towards Ireland’s climate change goals and creating a low carbon economy. Our pipeline is as attractive as it has ever been at this critical time for energy storage investment and we are keen to continue to execute accretive acquisitions for our shareholders in the near term”, the CEO added.
Gore Street shares were 0.2% lower at 107.3p in early deals on Tuesday.
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