Zenobe gets European EV expansion PF
KKR and Infracapital-backed Zenobe's €325m European expansion debt is structured as a five-year non-recourse project financing and works like a credit line, with tranches drawable for the first four years.
The deal closed oversubscribed, which brought margins slightly lower than in last year's £410m UK/Ireland expansion debt package that closed in May (see PFI 770). As a result of the lower margin, the company is planning to gear projects a bit higher in Europe than its 67:33 debt-to-equity financing strategy in the UK.
The new debt comes via MUFG, CIBC, ABN AMRO, National Australia Bank, Siemens, Credit Agricole and BayernLB, the latter joining as a new lender to Zenobe alongside the other relationship banks. Santander, Societe Generale, Clifford Chance and AOS were advisers.
The other main difference between the UK financing and the new European expansion debt is that the Europe deal backs entry into a new market, meaning there are no assets or operations to refinance yet.
The European EV market is more fragmented than the British and Irish ones, with many European players being family-owned or smaller, newer businesses. The lower cost of debt for Zenobe's European expansion still allows the company to offer competitive prices to its customers, which usually have long-term concession agreements with public authorities that Zenobe uses as a mitigant if the customer has little credit history.
The facility will provide multicurrency support in euros, Danish krone, Norwegian kroner and Swedish kronor across Germany, Spain, Belgium, the Netherlands and Sweden to support up to 1,000 more electric buses, trucks and associated charging infrastructure, starting with Belgium and Spain and later expanding into Scandinavia.
Barcelona's Grupo Julia is the first customer in Spain, with €42m being invested by Zenobe in vehicle financing and full infrastructure delivery for the electrification of 44 buses. Belgian customers with contracts already in place include Coach Partners and Multiobus.
The new European debt follows Zenobe's €520m UK-Canada partnership to electrify Brampton’s transit network, one of North America's largest zero-emission bus projects.
KKR and Infracapital bought the business in September 2023, saying they would invest £870m in equity over the next four to five years.
