Foresight Solar Fund Limited FSFL secures rights to development-stage pipeline (9248T)
March 23 2023 - 3:00AM
UK Regulatory
TIDMFSFL
RNS Number : 9248T
Foresight Solar Fund Limited
23 March 2023
23 March 2023
Foresight Solar Fund Limited
("Foresight Solar" or the "Company")
FSFL secures the rights to a 467MWp development-stage solar
pipeline in Spain
Foresight Solar Fund Limited, a fund investing in a diversified
portfolio of ground-based solar and battery storage assets in the
UK and internationally, is pleased to announce it has secured a
pipeline of development-stage solar farms with a total potential
capacity of 467MWp. The entire project rights have been secured
from Grupo Cuerva, a renewable energy company and distribution
network operator, and another Spanish developer.
This strategic investment - codenamed "Project Lynx" - is
located across the south and east of Spain and consists of the
rights to six subsidy-free solar development projects. Two of the
sites have sought grid connections under the existing application
routes and one of those, totalling 57MWp, has already secured grid
access with the potential to reach ready-to-build status in 2024.
The remaining projects will apply for connections via the upcoming
capacity market auctions, which are estimated to take place over
the next few years.
Foresight Group's knowledge of the Spanish market and its
presence in the country were instrumental in establishing the
bilateral discussions that led to this transaction. The Investment
Manager's team in Madrid will oversee the projects' evolution
alongside the experienced developers responsible for establishing
them, who will continue the development under a services
agreement.
Development-stage projects are those that have secured land
rights and have a delivery plan but still require additional work
to guarantee the necessary permits to start construction. Under the
structuring of this transaction, a modest down payment has been
made to the vendors at closing, with Foresight Solar retaining
preferential rights to increase the portfolio over time.
Full consideration for the assets is contingent on milestone
achievements tied to the projects securing grid connections and
reaching ready-to-build status over the next few years. Payments
for the development rights are also cross-collateralised, such that
the initial outlay for any asset that fails to progress may be
offset from future milestone payments for successful ones. This
helps to protect the Company's risk adjusted returns regardless of
the total number of projects that are eventually successful in
achieving planning consent.
There is no guarantee that all projects will proceed, and, from
an investment planning perspective, the Company has taken a prudent
view on the success rate for the portfolio. If it outperforms the
base case, Foresight Solar retains the option to recycle capital
via asset sales at the ready-to-build stage.
Commenting on the investment, Alexander Ohlsson, Chairman of
Foresight Solar Fund Limited, said: "Spain is an important market
for the Company given the government's commitment to significant
deployment of solar to help achieve ambitious decarbonisation
targets. Alongside that, the country also enjoys some of the
highest irradiation levels in Europe.
"The Investment Manager has the expertise to take on these types
of projects, carefully pricing risk and capturing the increased
financial upside for the Company. This was demonstrated when our
existing 125MW Spanish solar portfolio was brought through to
operations last year, resulting in approximately two pence per
share of NAV uplift in 2022. This acquisition now gives Foresight
Solar the opportunity to further deliver value for
shareholders."
Commenting on the deal, Ross Driver, Managing Director at
Foresight Group and Co-Manager of Foresight Solar, said: "Our
Madrid team has secured this landmark transaction for Foresight
Solar, and we are delighted to capitalise on the recent change in
investment policy to permit such investments. Securing projects at
this early stage allows the Company to capture the full benefit of
progressing assets through the value chain, where we can recognise
NAV uplift at both the ready-to-build and construction completion
milestones, as well as look to recycle capital along the way."
For further information, please contact:
Foresight Group
+44 (0)20 3911 2318
institutionalir@foresightgroup.eu
Matheus Fierro
Jefferies International Limited
+44 (0)20 7029 8000
Gaudi Le Roux
William Brown
Harry Randall
Citigate Dewe Rogerson
+44 (0)20 7638 9571
foresightsolar@citigatedewerogerson.com
Toby Moore
Laura Banks
Lucy Gibbs
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