UK electric vehicle fleet and battery storage provider Zenobe has established a multi-source debt structure of £241 million to accelerate the expansion of the EV fleet sector. The company aims to initially service and finance up to 430 new electric buses in the UK and Ireland.
The new funding platform from Zenobe is advised and structured by NatWest and is supported by a number of other financial institutions. The platform’s structure is comprised of long-dated term financing. This includes UK private placement institutions Aviva and Scottish Widows. At the same time, short term facility is provided by six banks: Lloyds, MUFG, NatWest, Santander, Siemens and Société Generale. These shorter-term investments are meant to fund capital investment to support electric bus and charging infrastructure that is provided under service contracts to bus operators.
The platform’s structure takes total debt finance support from financial institutions that amounts to over £300 million. Since 2017, Zenobe says it has raised equity of over £220 million, including a £150 million investment in November 2020 from Infracapital, the infrastructure investment arm of M&G. Zenobe says that these investments have allowed the company to provide services and finance for the acceleration of the UK’s electrification transport transition.
The new platform promises a win-win for Zenobe and its customers since the funding package is meant to play an essential role in financing Zenobe’s turnkey fleet electrification offering. The Zenobe platform’s multi-source debt structure is supposed to enable the company to raise senior debt financing against the service contracts that it has entered with bus operator customers.
Nicholas Beatty, Founder Director, Zenobe Energy, says: “This innovative funding structure marks the coming of age of structured finance solutions for fleet electrification, and signifies substantial growth for our business, allowing us to accelerate the rollout of electric buses across the UK.”
For Zenobe, long term debt of 15 years will be used to refinance the existing contracts with the company’s EV fleet customers. For the next stage of required financing and business expansion, the company aims to raise Capex/RCF debt funding of five years. Zenobe says it will utilise the existing documents to raise further debt funding for the expansion of fleet activities in the UK and Ireland.
Zenobe is already working with a number of major bus operators in the UK including Arriva, Abellio, McGills, National Express and Stagecoach, as well as local authority-owned bus companies. Most recently we reported that Leicester City Council rolled out a fleet of 11 new all-electric buses across its three Park & Ride routes for which the charging infrastructure was installed with a partnership with Zenobe Energy.