EnergyPathways (LSE:EPP) has launched front-end engineering and design for its planned CAES project to progress to a final investment decision in 2028 and says FEED will be funded by a £15m financing agreement announced today.
The MESH CAES project, which the company describes as the world's largest CAES and Britain's largest long-duration energy storage scheme, is designed for 300MW power and 55.2GWh storage and sits alongside planned gas and hydrogen storage and low-carbon hydrogen production at Barrow-in-Furness; the project has been designated nationally significant.
"I am delighted to kick off the FEED programme for our MESH CAES project, which will be an invaluable asset for the UK's electricity network and help deliver the objective for a clean energy system," Ben Clube, CEO of EnergyPathways, said.
The financing comprises a three-year secured Loan Note allowing up to £5m of drawdowns at the company's election, each with a 10% original issue discount, a six-month repayment holiday, six equal monthly repayments and security by fixed and floating charge.
Each drawdown will issue warrants equal to 30% of the drawdown exercisable at a Reference Price plus a 40% premium, the Reference Price being the five-day VWAP before drawdown.
If a scheduled cash repayment is missed the Investor may, for 12 months, subscribe to satisfy the amount at a price based on a 10% discount to the lowest VWAP in the 20 trading days prior to the missed repayment.
The £10m ATM Facility runs for three years, is capped at £10m net proceeds, limits tranche issuance to 2.99% of issued share capital post-issuance, carries a 5% fee to the Investor and allows up to 50% of proceeds to be set off against the Loan Note.
The counterparty is described only as a global institutional investor, drawdowns are subject to mutual agreement, the company expects to participate in Ofgem's LDES cap and floor second round later this year and is awaiting an NSTA decision on its Gas Storage Licence application.
