LONDON, UK: Gore Street, London’s first listed energy storage fund, announced the acquisition of a 57MW construction-ready energy storage project, in Leicester, England.
With this acquisition, the Company’s portfolio now consists of 577MW of operating or under construction projects in the UK and Ireland.
As previously indicated and in-line with its existing mandate, the Company’s pipeline includes opportunities in new markets – North America and Western Europe, which the Company has been developing and tracking for over a year and which present investment opportunities the Company believes add diversification and strong returns to its existing portfolio.
The Company’s current financial resources are now largely committed following this 57MW acquisition and Gore Street is proposing an issue of new Ordinary Shares to fund its ambitious portfolio expansion plan.
The Project consists of a 57MW energy storage system in Leicester, for which all land rights, grid connections and planning consents have already been secured. The Project is currently scheduled to become operational in 2023.
The Project will be connected to National Grid’s main transmission network rather than the local distribution network, which means that it will operate without an intermediary distribution network operator. This will reduce capex and operating costs and will be Gore Street’s first transmission connected site.
Gore Street’s Investment Manager, Gore Street Capital Limited, estimates the Project will have an unlevered IRR in-line with Gore Street’s target.
The expected total capex for the Project is estimated to be c.£22million over the next 12 to 18 months.
The Company’s investment policy allows up to 40% of the Company’s portfolio to be invested in projects outside the UK and the Republic of Ireland. This provides the Company with access to other high growth markets within the energy storage sector and enables better diversification of the portfolio.
Accordingly and as previously announced, in addition to its UK pipeline and assets in the Republic of Ireland, the Company has over the last year stepped up its coverage of the North American and Western European storage markets. These are markets that are now beginning to grow, where competition is lower, and which can provide complementary and diversified revenue streams to the Company’s existing portfolio of assets.
The Investment Manager is therefore actively assessing ready-to-build projects in geographies with competitive acquisition prices in diverse and comprehensive energy storage markets, which satisfy the Company’s return targeting North America and Western Europe, and the Company looks forward to updating the market in due course.
In total, the Company now has over 1.0GW / 2.5GWh in its overall pipeline, including a 2GWh active pipeline across North America and Western Europe, of which 160MWh is currently under exclusivity.
Alex O’Cinneide, CEO of Gore Street Capital, the Company’s Investment Manager, commented: “This UK acquisition is a further significant development for the Company, which offers opportunities for value creation as construction progresses and once operational, will be accretive to our income generating assets. This particular asset also benefits from being transmission connected providing attractive running cost savings which will provide an additional tailwind to our positive cash flow.
This is another example of Gore Street’s preeminent position in the development of the energy storage market where we have continually been a first mover at scale to the benefit of our shareholders. The acquisition will take Gore Street’s portfolio to 577MW across the UK and the Republic of Ireland, the most geographically diverse energy storage portfolio available to a financial investor today. We are delighted to have won this important competitive acquisition due to our strong transactional track record and sector leading reputation.
Gore Street’s significant international pipeline spanning North America and Western Europe enhances the Company’s position to capitalise on the continued priority for all markets to support the transition to a low carbon economy through the increased use of renewable energy.
While the GB and Ireland have been the pre-eminent markets for energy storage investment, other more nascent markets offer enormous potential growth opportunities and complementary revenue streams which we see as extremely attractive. We expect to update the market in due course with our pipeline progress.
The proposed Placing and retail offer will progress our ambitious portfolio growth plans and we look forward to leveraging our experience and proven capital discipline, to find the best opportunities to generate further shareholder value following the rapid and successful deployment of a significant portion of the £135 million raised in April 2021.”
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