Bluefield Solar acquires portfolio of 15 UK plants

Bluefield Solar has acquired a UK-based portfolio of 15 operational solar photovoltaic plants, it announced on Monday, with a total installed capacity of 64.2 megawatt peak.

The London-listed firm said it has also agreed a new £110m, three-year term loan facility with NatWest.

It said that on 20 August, it completed the acquisition of the portfolio for an initial cash consideration of £106.6m, including working capital.

The final consideration could be increased by up to £2.1m, contingent on securing asset life extensions.

Bluefield said it would receive the economic benefit of all cash flows from the portfolio from 1 January 2020.

The portfolio consists of 15 ground-mounted operational solar photovoltaic plants, with eight sites clustered in the south west of England, two in west Wales and a further five across central and eastern England.

Bluefield said the portfolio benefitted from “attractive subsidies”, with 13 of the projects accredited under the Renewable Obligation Certificate (ROC) regime, with tariffs ranging from 1.4 to 2.0 ROCs, while two of the projects are accredited under the feed-in-tariff (FiT) scheme.

Including the FiT projects, the weighted average tariff for the portfolio was equivalent to about 1.8 ROCs per MWh.

In the period between 2021 and 2033, with 2033 being the year in which the subsidies on the earliest plants begin to expire, the proportion of regulated revenues from the portfolio was projected to be around 66%, compared to 57% for the company's existing portfolio.

The acquisition was financed by a bespoke three-year, interest only, re-drawable term loan at an effective all-in cost of 1.41%.

Additionally, the company said it had chosen to hedge 75% of the loan over a notional 18-year period, at a swap rate of 0.31% until 2038, to provide underlying rate certainty in anticipation of a refinancing scenario in or before August 2023.

Following the transaction, the company's total outstanding debt had increased to £332m, with the total installed capacity of its portfolio growing to 543 MWp.

The debt financing enabled the company to achieve its aim to optimise its leverage.

Using the company's 31 March unaudited net asset value of £418.7m, the leverage level of the company would rise from around 34% to 44% of gross asset value.

An updated audited net asset value as at 30 June would be published when the firm releases its next set of accounts in September, the board said.

“This is an excellent acquisition by the company,” said chairman John Rennocks, saying that it combined the addition of a portfolio of high ROC-banded assets with bespoke low-cost financing, and enabled it to move its level of gearing in line with the board's target.

“This acquisition will be immediately incremental to earnings and further underpins our projected results and dividends for the current financial year ending in June 2021 and beyond.

“The board and our advisor continue to carefully assess a strong pipeline of opportunities across both primary and secondary markets.”

At 1127 BST, shares in Bluefield Solar Income Fund were up 0.34% at 131.44p.