£30m Junior Debt Financing Line by Sequoia to Energy Transition Sector
Sequoia expands presence in the Energy Transition sector through £30m Junior Debt Financing Line
Sequoia Investment Management Company (‘Sequoia’), the specialist infrastructure debt asset manager, has invested £30m in a junior debt financing line to Forsa Energy, the European energy company, for the continued roll out of its flexible gas assets. These flexible gas projects are essential to support the GB power market’s energy transition to low carbon electricity generation by providing quick response power when renewables are unable to generate or there is high power demand.
This funding complements Forsa’s existing senior debt facilities for the 60MW of projects already in construction and will support the build out of the next 110MW later this year, and other project beyond that.
Greg Taylor, Director, Sequoia, commented: “This is our first transaction with Forsa Energy and we are pleased to have had the opportunity to support its initiative to become a key player in the Energy Transition sector. The combination of Forsa’s highly qualified management team and strong credit characteristics met with our strict investment criteria for the SEQI fund. The Sequoia loan will provide the company with a platform to accelerate their growth and highlights our role as a leading lender in this increasingly dynamic and growing part of the infrastructure debt market.”
Tim Senior, Forsa’s Commercial Director, said: “I am very pleased to have secured this funding to support our ambitious growth plans in the flexible gas market. I would like to thank Sequoia for working with us to complete the financing. Despite the current regulatory uncertainty we remain convinced of the requirement for flexible electricity generation in the GB system and that small gas- fired plants are the most efficient, cost-effective method of meeting this requirement in the short to medium term. It is great to see this belief vindicated by the support of both junior and senior lenders. We would also like to thank our shareholder Riverstone for its active support while we continue to build out our projects and platform.”
Jon Poley, Forsa’s Director of Gas Generation, commented: “We are delighted to complete the financing which is the next milestone in the development of our flexible energy platform. The construction of the current projects is an excellent first step towards our ambition of being a major player in the flexible generation market. We plan to establish a portfolio of a minimum of 600 MW of gas assets over the next 2-3 years as well as considering other technologies as they become commercially viable.”
Sequoia was advised by McDermott Will & Emery LLP; Forsa Energy was advised by EnVent Capital Markets, Brodies LLP, Aurora Energy Research and GHD.
Notes to editors:
About Sequoia Investment Management Company (‘Sequoia’)
Sequoia is a specialist in infrastructure debt asset manager with extensive origination, analysis, structuring and execution experience in the sector. The directors are the Investment Advisor to two funds: the FTSE 250 Sequoia Economic Infrastructure Income (‘SEQI’) Fund, a leader in investing in
income-generating economic infrastructure debt, and Sequoia Infrastructure Debt Fund, a LP-GP euro investment grade and cross-over fund. SEQI has $1.7 billion assets under management, across twelve mature jurisdictions and a range of sectors and sub-sectors. The portfolio has grown to over 60 positions as it has deployed funds from a series of successful, oversubscribed capital raises.
About Forsa Energy
Forsa Energy is an energy company which develops, builds and operates energy assets across Europe. It is backed by Riverstone Holdings LLC, with a strong mandate to grow a portfolio comprising renewable generation and gas generation.
Forsa’s management team includes the same key people that were instrumental in the establishment and the success of Velocita Energy Developments and 2020 Renewables. Now, with the inclusion of experts in the gas sector, it offers a wealth of experience across the energy sector, including the successful establishment and build-out of utility-scale renewable platforms, the build- out of a flexible generation platform, and extensive experience with larger-scale power generation.
Forsa’s current portfolio in the UK comprises an onshore wind portfolio, which includes fully- consented large-scale onshore wind assets and a further mature development pipeline, and a flexible gas power portfolio which comprises 60 MW under construction, 110 MW approaching financial close and a further 60MW in late stage development. Much of this capacity is supported by Capacity Market contracts. Forsa also has a substantial pipeline of further projects in various stages of development. The development, financing and construction management of these projects is undertaken by Forsa’s in-house gas team.
Forsa is focused on expanding its flexible gas assets through a combination of in-house development, acquiring projects from developers or through development partnerships.
The gas plants complement Forsa’s existing portfolio of c.200 MW of consented onshore wind projects, a further c.150MW onshore wind project currently going through final stages of its consent process, with in addition to this a significant and growing portfolio of earlier stage new onshore wind developments in Scotland.
For further information please contact:
Tulchan Communications (Sequoia)
+44 (0)20 7353 4200
Evelina Griganaviciute (Forsa)
+44 (0)20 7952 2233