International legal practice Osborne Clarke has advised JLEN Environmental Assets Group Ltd ("JLEN"), the listed environmental infrastructure fund, on an investment of up to £26.7m into a glasshouse project via a combination of a senior secured loan for the construction of the glasshouse and a convertible loan and a minority equity stake in the glasshouse operator to provide for working capital.
The consented 2.1 hectare glasshouse will be built in the UK, in proximity to an existing anaerobic digestion ("AD") plant owned by JLEN, which will separately be upgraded to supply low carbon heat and power to the glasshouse via a private wire. Waste heat from the existing CHP engines will be captured and delivered by pipe and a heat exchanger to the glasshouse. Wastage from the glasshouse produce may also be returned to the digester, creating a circular ecosystem.
The glasshouse project will receive energy via the private wire at a discount to the import market price and the AD plant will benefit from the inflation-linked RHI regime and sell electricity at a premium price versus exporting it to the grid while also utilising otherwise wasted heat.
The advanced glasshouse, which is expected to commence production in 2023, will be capable of growing a wide array of different horticultural products, from consumable produce to cut flowers. Its initial operator will focus on the lawful cultivation of the heavily regulated tetrahydrocannabinol flower, conforming to tightly monitored licence requirements for secure supply to established UK-based pharmaceutical manufacturers.
This will generate new diversified revenue streams for JLEN derived from glasshouses, whilst increasing revenues from an existing asset.
The Osborne Clarke team was led by Partners Chris Yeo and Matthew Bodfield with support in corporate from Associate Hannah Stevens, in projects from Associate Director Amy Stray and Associate Shraiya Thapa, in banking and finance from Partner Jakub Kubicki and Associate Director Bethan Moore and Partner Charlotte Walker, Associate Director Duncan Parker, Senior Associates Jonathan Culley and Ricky Takhar advising on real estate and construction matters.
Osborne Clarke has an established and well-respected position as one of the leading law firms advising on renewable energy projects and transactions. As businesses strive to meet the challenges of decarbonisation, Osborne Clarke is supporting its clients on projects to procure, fund and develop the sustainable infrastructure, buildings and land use of the future. The team’s experience and understanding of the energy sector means they are well placed to advise on your decarbonisation journey.