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A&O advises Zenobē on "first of its kind" debt structure to radically accelerate expansion of Electric Vehicle sector

A&O has advised Zenobē Borrower FleetCo Limited (‘Zenobē’) and its subsidiaries on the establishment of a new common terms financing platform. The GBP241 million multi-source debt structure is a “first of its kind” funding platform that will enable Zenobē to refinance its existing fleet of electric vehicle (‘EV’) buses and to finance up to 430 new EV buses in the UK and Ireland.

Zenobē is a UK market leader in EV fleets and battery storage, with 175MW of operational and contracted storage assets and 394 EV buses or an estimated 25 per cent market share of the UK operational EV bus sector. It currently works with all major bus operators in the UK including Arriva, Abellio, McGills, National Express and Stagecoach, as well as local authority owned bus companies, and is enabling the faster take up of EV buses in the UK, helping to meet legally binding climate change targets and improve air quality across the country.

The innovative financing structure provides Zenobē with access to bank and institutional funding sources to meet existing and future funding obligations whilst ensuring long term value for money for its customers. The financing also features a “use-of-proceeds” ESG-linked facility, allocating a significant portion of the new financing proceeds towards “green projects” in line with the “Clean Transportation” category featured in the Green Loan Principles published by the LMA in February 2021.

Infrastructure partner Ed Moser commented: “We’re delighted to have advised Zenobē on this significant financing for its EV fleet business. The decarbonisation of transport networks is a key pillar of the UK government’s net zero strategy. Domestic transport is the largest contributor to UK domestic greenhouse gas emissions, responsible for 24% in 2020, so the financing and provision of electric fleet infrastructure plays a critical role in delivering that strategy.”

Nicholas Beatty, Founder Director of Zenobē said “This is a defining step forward for our company, and the industry, and will support our aims to materially increase the number of electric buses on the UK and Irish roads. We were very impressed by the professional approach of the Allen & Overy team supporting our company in developing and implementing this innovative financing.”

Ed Moser led the A&O team in London with partner Tim Conduit, senior associates Alexandra Page and Jonathan Roberts, associate Danielle Hyde and trainee Will Chuter.

This is the latest example of A&O’s extensive involvement with transactions contributing to the energy transition, with others including advising the European Investment Bank on the EUR170m financing of the world’s first and largest baseload renewable energy power plant using hydrogen technology in French Guiana (the CEOG Project), closed by Meridiam, HDF and SARA and awarded Americas Hydrogen Deal of the Year 2021 by PFI Global, and current mandates advising on green hydrogen and battery manufacturing facilities across Europe.