The inflation-linked financing is repayable over 18.5 years and is provided by M&G’s clients seeking secure cash flows over the long term.
The financing is secured against four solar farms, with a total installed capacity of 39 MW, generating enough electricity to power approximately 9,000 average homes. The sites have been operational since March 2014 and are located in Glamorgan, Norfolk and Dorset.
Giles Clark, CEO, Primrose Solar, stated:
We are very pleased to have worked with M&G and Novatio Capital to complete the refinancing of our first four solar farms. Securing long-term financing from a major institutional investor such as M&G is a strong endorsement of the quality of these sites, and of our commercial arrangements.Primrose now has 175 MW of solar projects either operating or under construction, making an important contribution to local and national renewable energy targets.
Tim Huband, Head of Project & Infrastructure Finance, M&G Investments, commented:
This landmark transaction injects long-term institutional financing into the emerging solar power sector. We have structured the deal to deliver inflation-linked returns, with good security to our pension fund clients. Given this is a relatively new sector seeking institutional investment it is essential for deals to be structured to protect client capital and ensure risks are appropriately rewarded. The investment characteristics on offer from this sector are attractive to our clients and we are keen to do more.
Novatio Capital acted as the arranger of the loan facility.
Justin May, Executive Director, Novatio Capital, added:
We are delighted to have acted as the arranger of this transaction. We have now arranged and executed £200 million of long term debt financing for solar assets in the UK and continue to seek further interesting investment opportunities.