UK electric vehicle fleet and battery storage provider Zenobe has set up a £241m multi-source debt structure to accelerate the expansion of the electric vehicle fleet sector. The company aims to maintain and initially finance up to 430 new electric buses in the UK and Ireland.
Zenobe’s new financing platform is advised and structured by NatWest and is supported by a number of other financial institutions. The structure of the platform is composed of long-term financing. This includes UK private investment institutions Aviva and Scottish Widows. At the same time, short-term facilities are provided by six banks: Lloyds, MUFG, NatWest, Santander, Siemens and Société Générale. These short-term investments are intended to finance capital investments to support electric buses and charging infrastructure that are provided under service contracts to bus operators.
The structure of the platform supports the total debt financing of financial institutions which amounts to over £300 million. Since 2017, Zenobe says it has raised more than £220m in equity, including a £150m investment in November 2020 from Infracapital, the infrastructure investment arm of M&G. Zenobe says these investments have enabled the company to provide services and fund the acceleration of the transition to transport electrification in the UK.
The new platform promises a win-win for Zenobe and its customers as the financing is expected to play a vital role in financing Zenobe’s turnkey fleet electrification offering. The multi-source debt structure of the Zenobe platform is meant to allow the company to raise senior debt funding on service contracts it has entered into with bus operator customers.
Nicholas Beatty, Founding Director of Zenobe Energy, said: “This innovative financing structure marks the advent of structured finance solutions for fleet electrification and signifies substantial growth for our business, allowing us to accelerate the deployment of electric buses across the UK. ”
For Zenobe, 15-year long-term debt will be used to refinance existing contracts with customers of the company’s electric vehicle fleet. For the next stage of required funding and business expansion, the company aims to raise five-year Capex/RCF debt financing. Zenobe says it will use existing documents to raise more debt funds for expanding fleet operations in the UK and Ireland.
Zenobe already works 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. More 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 charging infrastructure was installed in partnership with Zenobe Energy.