Zenobe Energy, the leading EV fleet and battery storage specialist, has established a multi-source debt structure of £241 million to radically accelerate the expansion of the EV fleet sector. The first of its kind funding platform, advised and structured by NatWest, draws on the support of several financial institutions, and will enable Zenobe to initially service and finance up to 430 new e-buses in the UK and Ireland.
The innovative structure takes total debt finance support from financial institutions to over £300 million. Since 2017, the company has also raised equity of over £220 million, including a £150 million investment in November 2020 from Infracapital, the infrastructure investment arm of M&G, which has allowed Zenobe to provide services and finance the acceleration of the UK’s transition to a green road transport system. The institutions took into account the green credentials of Zenobe, and the debt’s application and the company benefited from reduced financing costs accordingly.
This transaction is an innovative and bespoke funding package which will play a vital role in financing Zenobe’s turnkey fleet electrification offering. The multi-source debt structure will enable the company to raise senior debt financing against the service contracts that Zenobe has entered with bus operator customers.
The structure comprises long-dated term financing, including from UK private placement institutions Aviva and Scottish Widows, alongside a shorter-term facility provided by six banks (Lloyds, MUFG, NatWest, Santander, Siemens and Sociētē Gēnērale) that is intended to fund capital investment to support e-bus and charging infrastructure provided under service contracts to bus operators. The funding platform will be used to raise additional financing over time, and in doing so broaden its funder base as Zenobe focuses on the expansion of fleet activities in the UK and Ireland.
Zenobe is a UK market leader in EV fleets and battery storage, with 175MW of operational and contracted storage assets and 394 EV buses or an estimated 25 per cent market share of the UK operational EV bus sector. It currently works with all major bus operators in the UK including Arriva, Abellio, McGills, National Express and Stagecoach, as well as local authority owned bus companies, and is enabling the faster take up of EV buses in the UK, helping to meet legally binding climate change targets and improve air quality across the country. Zenobe’s services can act as match funding to government grants, enabling the available grant finance to go further and bring more electric buses onto UK roads.