Octopus and Lightsource secure £76 million refinancing facility from Barclays for solar portfolio

Octopus Investments and Lightsource Renewable Energy have closed the project refinancing of a portfolio of 76.4 MW of UK solar farms managed by Octopus.

Barclays has provided the £76 million (US$114.6 million) term facility.

These projects are among the largest solar photovoltaic systems that supply power into the UK national grid. Octopus originally acquired the solar farms from Lightsource in April 2014, and subsequently engaged Lightsource to advise on the senior debt refinancing.

The solar farms in the portfolio have been built under the Renewables Obligation (RO) subsidy regime, and include:

• Abbots Ripton (24.7MW),
• Mingay Farm (19.3MW) and
• Ermine Street (32.4MW).

This transaction represents the first refinancing between Octopus and Barclays and provides encouraging signs for future large-scale debt refinancings in the UK solar market.

Barclays acted as sole mandated lead arranger on this transaction. The bank has a growing presence in the UK solar market, having funded in excess of c.200MW over the last three years. The refinancing included a long term Power Purchase Agreement (PPA) signed with npower.

Paul McCartie, Structured Finance Director at Lightsource, said:

“The trust and support we have garnered in recent years from key financial institutions like Barclays has allowed us to grow and develop into the leading solar energy portfolio holder in the UK. It is our ambition to achieve more than 1GW[1] of installed capacity by March 2015 and refinancing is an essential component in helping us reach this important industry milestone. We look forward to working with Barclays in future on further financings.”

Giuseppe La Loggia, Portfolio Director at Octopus Investments, stated:

“The support we have received from Barclays has been outstanding. The portfolio contains high quality assets and it’s great to have Barclays’ backing as we continue to invest in solar on behalf of our investors and look to realise returns for them. There remains a significant opportunity for further growth in the UK solar market and we are delighted that Barclays is lending its support to us and the solar industry as a whole. We look forward to developing our relationship with them.”

Neil Fleming, Director of Infrastructure and Project Finance, Barclays, commented:

“Octopus and Lightsource are leading the way in the UK solar market so it is only natural that we would look to support them in achieving their ambitions. As a business, Barclays is a huge advocate of the UK market and is committed to assisting the transition to a low carbon economy and increasing the number of green jobs in the UK.”

Jodie Eaton, Director npower Business Solutions, added:

“We are delighted to have signed this long term Power Purchase Arrangement with Octopus and Lightsource, one of the leading solar developers in the UK. One of our key aims is to become the partner of choice when it comes to providing support for renewable projects, further demonstrating our commitment to sourcing renewable power for our business customers.”