Iona Capital Ltd (Iona), a UK specialist investment manager with a focus on investing in long term projects in the renewable and low carbon energy infrastructure sector, has announced that it has successfully closed a debt financing on behalf of one of its funds, Iona Environmental Infrastructure LP (IEILP), which has invested in an operational portfolio of 11 anaerobic digestion (AD) renewable energy assets, located across the UK.
IEILP is a greenfield fund, which launched in 2012 and is backed by UK pension fund investors. The investors’ funds were deployed to construct four large gas-to-grid assets, two local-authority backed combined heat and power (CHP) assets, and five agricultural CHP assets. The assets are now fully operational, generating a combination of renewable electricity, heat, and biomethane gas.
Iona engaged Investec Bank Ltd, an international corporate and investment bank, as exclusive financial adviser to structure, arrange and syndicate up to GBP60 million (≈ EUR 66.8 million) of senior secured term facilities. Allied Irish Bank (AIB) and Banco de Sabadell have been selected as mandated lead arrangers.
It is a testament to the resilience of the underlying assets and the commitment of everyone working on the project that debt financing was completed in such challenging market conditions. It is also a significant milestone for Iona and a firm endorsement of our investment strategy in the low carbon sector, said Nick Ross, founder of Iona Capital.
The financing will enable further distributions to be made to investors.
The transaction provides a continued vote of confidence in financing bioenergy projects, and the importance of Anaerobic Digestion in the transition towards Net-Zero. We worked closely with Iona Capital and potential funders to present the high quality diversified AD platform, benefitting from robust contractual structures and income streams backed primarily by UK Government subsidies. This resulted in considerable funder interest and a strong commitment to this well-structured financing, said Gulzar Hanspal, from Investec’s Power and Infrastructure Finance team.
Iona Capital was also advised by Simmons & Simmons (legal). AIB and Banco de Sabadell were advised by Ashurst (legal), Fichtner (technical), Strutt & Parker (feedstock supply), Cornwall Insight (power and gas), Marsh (insurance), Mazars (model audit) and RSM (tax).
