Background:

  • Rothes CoRDe (Rothes) and Beckton Energy (Beckton) are two renewable combined heat and power (CHP) plants operating in the United Kingdom
  • Rothes is a c.8 MW/34 MWth power plant located in Speyside, Scotland and uses a combination of woodchip and a by-product of the whisky distillation industry known as draff, to sustainably generate electricity. Rothes plays a critical role in the local whisky economy
  • Beckton is a c.18 MW/28 MWth CHP bio-liquids fired power plant which is strategically located in London and integrated with key infrastructure owned by the major utilities Cadent Gas Limited (formerly National Grid Gas Plc) and Thames Water Utilities Limited, to which Beckton provides heat and electricity respectively
  • Both plants are long-term, highly contracted operational renewable CHP plants of scale, delivering stable cashflows over the long term and are underpinned by accredited Renewable Obligation Certificates
  • DC Advisory (DC) advised Arjun Infrastructure Partners (AIP) on the acquisition of a majority stake in Rothes and Beckton in 2019 and has significant knowledge within the renewable energy sector

Process:

  • DC was engaged by AIP to provide debt advice on the financing and run a comprehensive refinancing process engaging various sources of liquidity in the bank and PP market
  • DC led a number of detailed work streams including financial modelling, debt structuring & full documentation negotiations in order to address a number of key objectives, including:
    • Debt structuring to enable management and shareholders to deliver the business plan through the upsized refinancing of the existing senior facility at Rothes and distribution of dividends
    • A portion of proceeds to finance future growth projects at Rothes

Outcome:

  • Despite challenging Covid-19 related market conditions, DC was able to deliver a strong outcome in meeting AIP’s objectives, including:
    • Refinancing of the existing facility with a competitively priced, fixed rate cross-collateralised PP facility funded by BlackRock to support the management and shareholders in delivering the business plan of both plants
    • Raising a long-dated amortising facility which eliminates refinancing risk with a tailored repayment profile to the end of ROC life, and securing favourable terms reflective of the strength of the assets