Gore Street's Drumkee battery energy storage asset. Image: Gore Street
Gore Street Energy Storage Fund has raised gross proceeds of £150 million from an initial issue, which is to be used to pursue its 1.3GW pipeline.
This initial issue – which was made of an initial placing, initial offer for subscription and initial intermediaries offer – was significantly oversubscribed, the company said, leading to Gore Street upgrading its target size from £75 million.
Institutional and retail investor demand was “considerable”, according to the company, with over £150 million raised in the initial issue, and therefore subject to scale back.
CEO of Gore Street Capital Alex O’Cinnede told Solar Power Portal that the company has authorisation for 750 million new shares, with the new shares totalling £150 million being part of that.
“That can give you a rough idea of how much we plan to raise in the coming years,” he said. “The target for our portfolio is now 40% GB/Ireland and then 60% Western Europe and North America, but we’re currently at 85% UK/Ireland so it will be a while before we get there. Basically, half of our portfolio will always be GB/Ireland.”
The net proceeds of this fundraise are to go towards acquiring and construction new projects in its 1.3GW pipeline, with this comprising 900MW in Great Britain, 375MW in North America and 100MW in Europe.
It follows Gore Street’s recent expansions into Europe and North America, the former through the acquisition of a 90% stake in a 28MWh operational energy storage asset in Cremzow, Germany, and the latter via the acquisition of a portfolio of eight energy storage assets in Texas.
“We've been active in the building out of storage as an asset class in UK and Ireland, and aim to be an initiator of the business model in these new international markets too,” O’Cinneide said.
“We can leverage our expertise in supply chain as it's the same manufacturers across markets, and it's the same types of revenues too, albeit with different regulations. We expect to see continued strong growth in the energy storage market in 2022 but I think other players will have difficulties in their supply chain.
“Unless you’ve put in the time and effort like we have in terms of building the strong set of partnerships with manufacturers like Gore Street has, supply chain issues could become an impediment to growth.”
Earlier this year, fellow London Stock Exchange-listed energy storage fund Gresham House detailed how it had faced some COVID-19 related supply chain challenges relating to the construction of its current pipeline, with some project timelines having been affected.
This is not exclusive to energy storage, with prominent issues in the solar supply chain during 2021. Indeed, NextEnergy Solar Fund last week outlined how construction on its 36MW Whitecross solar site was delayed due to material volatility in the solar PV module supply chain post COVID-19- although it said this has since stabilised.
The new Gore Street funding has been raised from the issue of 136,363,636 new ordinary shares at the issue price of 110 pence per share.
Following admission of the new shares to the premium segment of the official list and to the London Stock Exchange, the company’s issued share capital will comprise 481,399,478 ordinary shares.
Gore Street’s success in this latest fundraise follows a rocky start to fundraising for the company, which in 2018 - the same year it became the UK’s first listed fund targeting energy storage - targeted a £100 million fundraise, which it later cut to just £35 million.
Since then, it has lauded the “strong demand” from investors, with recent fundraises seeing it secure £60 million (December 2020) and £135 million (April 2021).
Additional reporting from Cameron Murray.