Sale of stake in Spanish portfolio
16 November 2023
Foresight Solar Fund Limited
(the "Company", "Foresight Solar" or "FSFL")
Sale of stake in Spanish portfolio
Foresight Solar, a sustainability-focused fund investing in solar and battery storage assets in the UK and internationally, sold a 50% stake in its Lorca portfolio in Spain. A specialist Luxembourg-based fund advised by EB-Sustainable Investment Management (EB-SIM), a subsidiary of Evangelische Bank, paid €26.9 million for the assets, a 21% premium to their third quarter holding value. This represents an exit IRR of 12.1% on funds invested to date in the stake sold.
Proceeds from the transaction will be fully used to pay down the Company's variable rate revolving credit facility further, lowering gearing and reducing interest expense. The Investment Manager is advancing conversations to finalise the divestment of the announced c.200MW of operational assets and the process will continue into 2024.
Lorca is a 99MW subsidy-free portfolio that includes three assets: Las Salinas (30MW), Los Llanos (49MW) and Los Picos (20MW). Purchased at the ready-to-build stage three years ago, Foresight Solar took the projects through construction, realising a 2 pence per share NAV uplift when they became operational in 2022.
The portfolio has a 10-year fixed price power purchase agreement (PPA) with Statkraft, one of Europe's largest renewable energy providers. Signed in 2021, the PPA provides long-term revenue visibility for approximately 70% of the assets' annual production and contributes to dividend cover. In the nine months to September 2023, the sites generated 138GWh of electricity.
Alexander Ohlsson, Chair of Foresight Solar, said: "After a comprehensive analysis of our portfolio, we concluded these assets were the ideal option to start our divestment process. This deal clearly exemplifies our strategy: we acquired Lorca at the ready-to-build stage and capitalised on the Investment Manager's expertise to construct the assets and bring them to operations, realising the full financial upside for the Company. We are now selling a stake at a premium to crystallise value and recycle capital into other options while maintaining exposure to an asset that will continue to deliver long-term revenues and contribute to dividend cover."
Dr Bernhard Graeber, Managing Director and Head of Alternative Assets at EB-SIM, said: "Spain enjoys some of the highest irradiation levels in Europe, and the Lorca portfolio is operationally set up to maximise electricity production. The revenue visibility from the PPA makes it even more appealing. Now that we are well established in Central Europe, we are increasingly turning our attention to Southern European countries and are glad to have found the right partner in Foresight Solar."
EB-Sustainable Investment Management GmbH (EB-SIM) is a leading asset manager for sustainable investments. The Kassel-based company is a subsidiary of Evangelische Bank (EB). For more than 30 years, values-based asset management has been one of EB's core businesses and was spun off into EB-SIM as an independent division in December 2018. EB-SIM employs over 60 people and manages €5.3 billion in assets. It offers institutional and, via wholesale distribution, private clients exclusively sustainable investments in equity, bond and multi-asset strategies, as well as private debt and real assets. Its investment strategies are consistently aligned with the Sustainable Development Goals (SDGs) of the United Nations and the climate targets of the European Union.
For further information, please contact:
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Foresight Group Matheus Fierro (fsflir@foresightgroup.eu)
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+44 (0)20 3911 2318 |
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Jefferies International Limited Gaudi Le Roux Harry Randall
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+44 (0)20 7029 8000 |
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Singer Capital Markets Robert Peel Alaina Wong
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+44 (0)20 7496 3000 |
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Powerscourt Justin Griffiths Gilly Lock |
+44 (0)20 7250 1446 |
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EB-SIM Christiane Plach |
+49 (0) 175 366 1113 |
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