3i / Joulz
Raising non-recourse Senior Project Financing for a new SPV
- Avaxa was engaged by Joulz in March 2023 to assist in raising non-recourse Senior Project Financing for a new SPV with new solar assets on rooftops
- Joulz is a leading Dutch energy infrastructure solutions provider, since 2019 owned by 3i Infrastructure. Its strategy is aimed at supporting its customers in the significant changes in electrical infrastructure required to successfully navigate the Energy Transition. Its distinctive and integrated service offering provides a “one stop shop”, amongst others focused on solutions for the increasingly apparent network congestion issues, through its four business units: Infrastructure, Metering, Electric Vehicle (“EV”) Charging and Solar Energy. Solar Energy develops, realizes and operates solar installations in the B2B market, including financing, insurance, design and technology
- Given energy market developments and network congestion issues, Joulz has decided to offer a broader mix of solutions to its clients, tailored to each individual situation. For congested areas, Joulz will use a new asset deployment strategy through longer-term operational leases. Energy produced is for the lessee’s consumption only, which does not require a network connection or SDE++ subsidies. Pursuant to the operational lease model, the SPV will receive a fixed monthly payment for the lease of the assets under a long-term lease contract. No further project-based revenues over the course of the lease will be generated as (long as) no energy is sold to the grid. In non-congested areas, the business model will be similar to the projects in existing SPVs (grid delivery with and without SDE subsidies)
- This implies that projects in the new SPV will show greater variability in whether a network connection is present or will be present in the future, in availability over SDE++ subsidies, in contract durations and in business model (including operational lease)
- The inherent variability of projects within the new SPV required more flexibility from a financing perspective. Consequently, the key challenge in structuring the new financing was to incorporate sufficient financial and operational flexibility required to support the rollout of different solutions in one SPV. Furthermore, assessing and monitoring inherent credit risk of lessees under operational lease projects became more important for prospective lenders
- Avaxa assisted Joulz in financial modelling and by composing several documents (including a Teaser) with which a longlist of potential lenders was approached. Avaxa was also actively involved in composing a detailed Term Sheet and in the documentation phase
- As a result of the competitive process, including management meetings with selected potential lenders, we obtained multiple term sheets, providing Joulz optionality
