Investec Closes on ECP U.K. CCGT Financing
Oct 17, 2018
Energy Capital Partners (“ECP”) and Investec Bank plc (“Investec”) have successfully closed the debt financing of ECP’s 1.2 GW Combined Cycle Gas Turbine (“CCGT”) facility located at the Saltend Chemicals Park near Hull, UK. The debt facilities were structured by Investec, who also acted as sole bookrunner for the transaction. National Westminster Bank and Qatar National Bank acted alongside Investec as joint MLAs, to provide £140m of non-recourse debt and L/C facilities.
In Oct 17 US based ECP acquired the Saltend CCGT plant as part of a 1.8GW UK thermal portfolio disposal by Engie (75%) and Mitsui (25%). ECP’s investment in Saltend, and the successful debt financing of a merchant power plant is seen as a reflection of the changing dynamics of the UK power market.
Saltend is the first large-scale UK CCGT project, without a long term tolling arrangement, to secure non-recourse debt financing since 2008. The project is nonetheless underpinned by long term, predictable cash flows, including a power and steam offtake with the chemicals park. It also benefits from short term capacity market contracts and provides reliable ancillary services to the grid – in particular assisting with the balancing and integration of intermittent renewables.
Rahman D’Argenio, a partner at ECP, said:
“We are very pleased to reach successful financial close on this financing with a group of experienced funding partners. Investec’s experience in leading, structuring and syndicating thermal power financings was instrumental in running a successful and smooth financing process.”
Olivier Fricot, head of power & infrastructure debt in London at Investec, said:
“We see renewed appetite from investors into efficient, strategically located and well-run thermal power plants in the UK and North West Europe. The successful bookrunning process demonstrates positive interest in well-structured thermal power deals with partly merchant cash flows. It further endorses Investec’s thermal credentials in Europe and globally.”
ECP was advised by Latham & Watkins (legal). The lenders were advised by White & Case (legal), Arup (technical), Baringa (power market), Marsh (insurance) and Operis (model audit).