InfraRed Capital Partners acquires UK solar parks with debt from banking club


InfraRed Capital Partners acquires UK solar parks with debt from banking club

London-based InfraRed Capital Partners Limited (InfraRed), one of the UK’s leading environmental infrastructure investors, has acquired three ground-mounted solar parks in Cornwall with debt financing from a consortium of banks – Royal Bank of Scotland Corporate & Institutional Banking (RBS CIB), HSBC Bank Plc and Santander Global Banking and Markets (SGBM).

Also known as solar farms or photovoltaic power stations, solar parks are large-scale photovoltaic systems that supply power into the UK national grid. The three parks in Cornwall offer up to 15MW in power and will provide enough energy to meet the demand of 5,000 homes. The plants were originally developed by SGBM’s Asset & Capital Structuring team in partnership with Low Carbon Solar, a local developer.

All three of the solar parks were accredited prior to 1 August 2011 and are unaffected by the on-going announcements and changes to the UK Feed in Tariff (FIT) regime1(FIT looks to pay independent energy suppliers income for contributing energy into the UK national grid). Looking ahead, while it is forecast there will be no large-scale solar projects such as these completed under the FIT regime going forward (as the applicable new FIT tariffs do not encourage the required level of investment), the allocation of two Renewable Obligation Certificates to solar energy projects under the government's larger scale renewable investment scheme, the Renewable Obligation, coupled with falling technology costs, provides sufficient incentive for investment into UK solar, at least for the immediate future.

While each of the three banks in the consortium has contributed equal funding, RBS CIB has been appointed as agent, security trustee and account bank for the deal. SGBM acted as technical bank, being responsible for the review and analysis of the technical aspects of the project.

"The strong market knowledge and commitment of our banking partners has been very helpful in securing these assets. These solar farms in Cornwall are significant energy contributors for the UK, and represent a significant development for InfraRed’senvironmental infrastructure portfolio."

James Hall-Smith at InfraRed

"We are delighted to again support InfraRed in the closing of this project and keen to continue working together to deliver on the UK government’s renewables targets. This is a significant deal for The Royal Bank of Scotland and further endorses theexpertisewithin our team. We have a pipeline of project finance deals in the UK solar space that we are working on, both re-financings and acquisitions of pre-August 2011 FIT-based solar assets and larger scale opportunities under the renewables obligation."

Andrew Buglass, head of Energy, Structured Finance, RBS

"This is a fine example of where teamwork across different products proves a huge success. Santander’s participation in this transaction, both initially as equity investor and then as a financier, reinforces the good and long-standing relationship that is in place with Infrared Capital Partners, a GBM client through our Corporate & Investment Banking financial sponsors franchise."

Harry Bright, head of Credit Markets at SGBM

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