LONDON, UK: Harmony Energy Income Trust plc has accomplished the acquisition of three ‘shovel-ready’ pipeline projects totalling 181.9 MW / 363.8 MWh, increasing the Company’s portfolio to 9 battery energy storage system (“BESS”) projects with a complete capability of c.500MW / 1GWh.
The firm has acquired the projects pursuant to the Pipeline Agreement entered into on IPO which granted the Company a proper of first refusal of as much as 1GW of BESS projects, from Harmony Energy Limited (“HEL”) and Ritchie Bland Energy No. 2 Ltd (together the “Developers”).
The total consideration for the three projects is c. £21.5 million (supported by independent valuation) being satisfied through the net proceeds of the recent C Share Issue in conjunction with the issue of seven million new C Shares to the Developers.
The three projects, known as Wormald Green, Hawthorn Pit and Rye Common (Phases I and II), are anticipated to be energized in Q1 2024, Q2 2024 and Q3 2024 respectively, with grid offers secured. As beforehand announced, Harmony Energy Advisors Limited (the “Investment Adviser”) conducted a young course of for the provide of battery systems for this batch of projects and pursuant to that process, has agreed materials phrases with the chosen provider of the 2-hour duration battery systems.
Harmony Energy Income Trust has additionally agreed phrases to extend borrowing under its existing mortgage facility to allow it to attract down on the beforehand agreed accordion, alongside drawdown of funds pursuant to a brand new Revolving Credit Facility. The funds available to the Company, through this borrowing and its money resources, will fund the development of the Wormald Green and Hawthorn Pit projects in addition to the remaining Grid funds for Rye Common, that are important to maintain that project’s timeline. The mixed facility will increase the total debt available to ca. £130 million, topic to final signing. Alternative funding choices for the build-out of Rye Common are currently being considered.
The Investment Adviser is currently tendering for income optimisation services and expects to nominate a preferred bidder in due course. In addition, the lease choices for the projects have been executed and the balance of plant tender is close to to completion. In respect of Rye Common, the related lease choices have been entered into between Harmony RC Limited (the Rye Common particular purpose vehicle (“SPV”)) because the Lessee and a wholly owned subsidiary of HEL because the Lessor at market rates. HEL recently agreed to buy the freehold land related to this project, so as to take away pre-existing encumbrances, thereby ensuring that the SPV’s lease choices could be effected and thus enabling the project.
Both phases of the Rye Common project are held inside the SPV and share a single 99MW grid connection. Whilst Rye Common Phase I has full planning consents in place, Phase II is awaiting planning consent which is anticipated to be received in early 2023 in line with the general project timetable. Given the single project SPV and single grid connection, buying the project now will imply that the Company could make the necessary grid milestone funds to proceed to safe the agreed energisation date. In the unexpected occasion that Phase II planning consent is not granted, a claw-back mechanism has been agreed in respect of a half of the consideration, pursuant to the related share buy agreement.