Gresham House announces equity deal on 794 MWh of UK pipeline

Gresham House Energy Storage Fund (GRID) has signed an exclusivity agreement with Summit Transition Partners (STP), a joint venture between Japan’s Sumitomo Corporation and Taiwan-based touchscreen manufacturer TPK Holdings, covering a 25% equity stake in three pipeline projects totalling 397 MW / 794 MWh.

The three projects are Cockenzie (240 MW / 480 MWh), Monets Garden (57 MW / 114 MWh), and Elland 2 (100 MW / 200 MWh), each of which are currently due to start construction following the deal being completed.

Gresham House said in a stock announcement to the London Stock Exchange that the “majority of consideration” is expected to be paid at completion of transaction documents within the next week, with a smaller portion deferred to construction milestones.

STP also holds similar exclusivity on a 25% stake in two further projects, Lister Drive (57 MW / 114 MWh) and Ocker Hill (240 MW / 480 MWh), with those investments expected to close at a later date after GRID acquisition and financing.

GRID’s chair John Leggate CBE flagged in his comments that the deal is structured at project level rather than fund level, and didn’t disguise the importance of global majors being involved.

“We are delighted to sign this agreement with Summit Transition Partners and deepen the relationship with Sumitomo and TPK. The anticipated transaction demonstrates GRID’s continued ability to raise capital at a project level, despite GRID trading at a discount to [net asset value].”

For the avoidance of doubt, this means that instead of selling discounted shares in the main company’s fund, GRID raised cash by selling a 25% stake directly in the specific battery projects themselves.

TPK Holdings is somewhat of unusual name in the energy storage space, with the company primarily known as a touchscreen and supply chain manufacturer. However, the joint venture enables STP’s involvement via Sumitomo’s energy and battery expertise developed through its Japanese operations.

“By combining GRID’s proven development and operational capabilities with Sumitomo Corporation’s global energy expertise and battery-related know-how developed through our operation in Japan, we aim to accelerate the deployment of energy storage solutions,” said Seiji Kitajima, managing executive officer at Sumitomo Corporation.