Acquisition facility for John Laing

Client

John Laing Environmental Assets Group (JLEN) is listed on the London Stock Exchange. The fund invests in and manages operational environmental assets such as wind and solar farms, biomass, waste and waste water plants. At least half its portfolio will comprise of UK assets, with the rest in other OECD countries. Most of the assets will have been developed by John Laing plc, guaranteeing they meet its stringent quality standards and investment criteria.

John Laing plc, which launched JLEN in March 2014, is a leading international investor and manager of infrastructure projects, which include public private partnerships and renewable energy projects. 

Case

Renewables infrastructure is a growing sector, backed by government subsidies to meet European carbon-emission targets and rising consumer demand for more environment-friendly energy sources. The shift towards cleaner power sources, such as the sun, wind and plant energy (biomass), is opening up new opportunities to finance infrastructure projects to meet the growing demand for renewable energy. 

JLEN is an environmental infrastructure investment fund which aims to provide investors with a long-term sustainable dividend of six pence per share, increasing in line with inflation, and to preserve the capital value of its portfolio.

Solution

The financing market for renewables infrastructure sector is fiercely competitive and most banks are clamouring for business. NIBC was chosen as the original lender for the JLEN Facility, alongside HSBC, thanks to the bank’s existing relationship with John Laing plc and good understanding of its business. This relationship dates back to the 1990s, and NIBC has worked with the company on a number of PPP projects over the past 20 years.

This debt facility will give JLEN a flexible source of funding outside of equity raisings. It will be used to make acquisitions of environmental infrastructure projects to add to its current portfolio of wind, solar, waste and waste water processing assets and to cover working capital requirements. Borrowings under the facility will be repaid through cash received from its investment assets and future equity raisings.

“The fact that NIBC was chosen by such a strong sponsor demonstrates to the market that NIBC is able to work on complex renewables projects. NIBC has a strong reputation as a financer of infrastructure projects in the UK. The Infrastructure & Renewables team currently has over 120 projects under management, with around 60% of these in the UK. This transaction will strengthen both our long-standing relationship with this important UK client and our reputation in the environmental infrastructure space, attracting new investors and projects,” Horváth says.

The London Infrastructure & Renewables team has closed five project financings this year, which is an extremely good result considering the team has been rebuilt from scratch over the past year. “This is a fiercely competitive market and the team is doing a very good job in finding niches where clients appreciate our proactive approach and industry expertise,” Horváth says.