Ancala Partners LLP, an independent mid-market infrastructure investment manager, has announced that it has raised £51 million (US$63.6 million) of debt facilities for Green Highland Hydro (GHH), the asset ownership vehicle for hydroelectric power assets developed by Green Highland Renewables (GHR).
The financing follows a quadrupling in the size of GHR’s portfolio since Ancala acquired the business on behalf of its investment funds in April 2015. Since the acquisition, GHR has significantly outperformed its operational and financial targets.
The facility, which has been underwritten by Allied Irish Bank and ING, has been raised against a portfolio of 10 hydro assets, of which four are operational while the remainder are due to be commissioned over the next 12 months. The new debt facilities will be used to support construction of the schemes and refinance capital invested in operational assets.
Ancala identified the UK hydro sector as offering the potential to deliver attractive, low-volatility returns. Ancala acquired GHR as a platform to execute a consolidation and development strategy within the fragmented UK hydro sector and has been proactively implementing this approach.
Ancala has invested over £50 million (US$62.4 million) of equity into GHR and is looking to continue growing the business.
Spence Clunie, Managing Partner, Ancala, commented:
“This debt facility is testament to the achievements of GHR and successful implementation of our strategy since we acquired the business in 2015. Prior to our acquisition, GHR focused purely on the development of assets for third parties. Our strategy has been to transform GHR into a leading asset owner, consolidator and operator in the UK hydro sector.”
The operating hydro projects include a 0.8MW asset in Glen Lyon, a 2MW twin turbine scheme at Keltneyburn and a 1.75MW twin turbine scheme at Ceannacroc in Glen Moriston.