NextEnergy lauds ‘first-of-its-kind’ solar debt financing in Santander partnership

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

Solar investor NextEnergy Capital (NEC) has secured a “first-of-its-kind” debt financing from Santander as it continues its UK subsidy-free build-out.

A non-recourse debt financing structure of £100 million (US$123 million) is to be provided by Santander to cover investment in two subsidy-free projects, which are to have a constructed value of over £60 million, NEC said.

The 75MW Llanwern site in South Wales – which NEC is lauding as the UK's largest solar farm to date – and the 40MW Strensham site in Worcestershire are to benefit from the financing.

It is expected that the two farms will be connected to the grid in Q4 2020, with both to be contracted with Power Purchase Agreements. NEC then plans to move the farms to a new subsidy-free private fund dubbed NextPower UK ESG, which is to target a “significant number” of new-build subsidy-free solar projects in the UK.

The investor currently manages three investment vehicles: two private funds, NextPower III and NextPower II, and its listed investment company, NextEnergy Solar Fund (NESF), the latter of which owns c.754MW across 90 assets in the UK and Italy, comprising a gross asset value of c.£1,060 million (US$1,305 million).

NESF already has operational subsidy-free solar sites in the UK, including the 50MWp Staughton solar farm, which it celebrated as the UK's largest subsidy-free site when it was connected to the grid in 2019.

In April, NESF stated it was planning to start construction back up again “shortly”, with an 8.5MWp extension first on the list. Its UK portfolio performed above expectations in the year ended 31 March 2020, with a generation outperformance of 4.6%. NESF is targeting an operational subsidy-free solar pipeline as large as 150MW by the end of this year.

Michael Bonte-Friedheim, CEO and founding partner of NEC, said it was a “pleasure” to announce the new financing structure and the beginning of construction, particularly in light of the “challenging backdrop” of the COVID-19 pandemic. This, he said, “shows the strength and depth of the teams involved, coupled with the resilience of solar as an asset class in these times”.

Santander has partnered the NextEnergy Capital Group previously, having agreed a £40 million (US$49 million) revolving credit facility with NESF in 2018. Santander has also funded battery storage as well as solar, announcing it was providing a £25 million (US$31 million) non-recourse debt facility to UK battery storage firm Zenobe in 2019, allowing it to target behind-the-meter services and construction of new utility-scale projects.

Santander Corporate & Investment Banking's Alejandro Ciruelos said: “This is a groundbreaking transaction and an important step forward in making subsidy-free renewables viable in the UK.“ 

6 October 2021
The future is bright for a new era of US solar and storage, and the 8th annual Solar & Storage Finance Summit will provide opportunities to discuss solutions to the industry’s challenges and provide a networking platform designed to bring together the top minds in the industry to do business. With a mix of high-level, informative presentations and panels, a stellar cast of speakers and audience members with deal-making capacity, the 2021 edition of the event will be a sell-out success.

Read Next

September 16, 2021
Energy engineering firm Babcock & Wilcox is to enter the US solar market through the acquisition of a majority stake in Illinois-based solar contractor Fosler Construction.
September 16, 2021
North American module manufacturer Silfab Solar has received an investment led by private equity firm ARC Financial Corp to help scale up its US PV production footprint.
PV Tech Premium
September 15, 2021
Record-breaking power prices across Europe have turned the spotlight on the role fossil fuel plants play in generating electricity and how the transition to renewables-plus-storage could lower consumer bills.
September 14, 2021
Polish renewables developer PAD-RES is to be acquired by a joint venture established by real estate investor Kajima and private equity firm Griffin Real Estate.
September 13, 2021
The US House of Representatives has finally unveiled proposals which would extend the Solar Investment Tax Credit (ITC) for 10 years at 30%, but only for projects meeting certain labour conditions.
September 10, 2021
Renewables investor Magnora has increased its stake in Helios Nordic Energy as the Swedish solar developer looks to add 1GW to its pipeline by the end of next year.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
BRISTOL, UK
Solar Media Events
December 1, 2021