Foresight Solar, a closed-end investment company that invests in ground-based UK solar assets, raised a €28 million (~$31 million) senior debt facility for the 98.5 MW Lorca solar portfolio in Granada, Spain.
The senior debt facility will be provided by BayernLB, which enables Foresight Solar to obtain a long debt structuring tenor.
The debt facility enables the portfolio to optimize its capital structure and deliver higher cash yields while complying with financial covenants and debt service coverage ratios.
The portfolio is currently under construction and is expected to be connected to the grid by June 2022.
Following this transaction, the company’s total outstanding debt is £538 million (~$706.5 million), representing approximately 45.9% of the Gross Asset Value (GAV) of the company and its subsidiaries based on the company’s December 31, 2021, GAV of £1,172 million (~$1,539.13 million). This is within the 50% limit on the total gearing of the company’s GAV outlined in the prospectus.
In late 2021, the portfolio entered into a ten-year fixed price Power Purchase Agreement (PPA) with Norway-based Statkraft, a renewable energy company. The PPA provides the portfolio with a long-term hedge for approximately 70% of its annual production and increases the company’s revenue visibility.
Announced large-scale solar project funding came to $18.7 billion in 185 deals in 2021 compared to $18 billion in 167 deals in 2020, according to Mercom’s Q4 2021 solar funding and M&A report.