Investment group plans £200 million UK solar investment

06. September 2013 | Applications & Installations, Global PV markets, Industry & Suppliers, Investor news, Markets & Trends | By:  Ilias Tsagas

The Foresight Solar Fund would finance eight U.K. ground mount plants with the profits from a planned London IPO. A partner for the fund says solar offers a more attractive investment in the UK than wind.

A U.K. solar farm.

The Foresight Solar Fund is hoping an IPO will generate enough profits to develop eight utility scale solar plants in the U.K.

The partner of a U.K. investment group which yesterday announced a £200 million (US$312.5 million) fund to finance eight solar farms in the country, says solar offers a more predictable return for U.K. investors than wind.

On announcing the Foresight Group fund, partner Jamie Richards said: "Foresight Group has binding commitments for a portfolio of solar assets the company can invest in from the outset, which will give investors access to the more predictable financial returns that UK solar offers over wind."

Wind has long dominated the renewable energy sector in the UK but recent controversies over a reported opposition to 'unsightly' wind turbines from ministers in the Tory-Lib Dem coalition government may be steering investors towards solar.

Mr Richards added: "Solar power has been the biggest source of new electricity generation for the past two years in Europe. This year the UK is seeing a significant increase in installed capacity of utility scale solar PV power plants based on government support in the form of the Renewable Obligation Certificate (ROC) regime, which provides a stable 20-year revenue stream.

"The ROC regime, combined with recent significant reductions in the cost of solar equipment, provides a timely opportunity to launch this company coinciding with the new capacity coming on stream."!

The comments came as the finance group, via its Foresight Solar investment fund, plans to launch an IPO on the London Stock Exchange with shares priced £1 each.

'Long term potential for capital growth'

Foresight aims to invest the net proceeds in a portfolio of UK ground mount PV plants to "achieve its objective of providing shareholders with a sustainable and increasing dividend with the potential for capital growth over the long term," according to a company press release announcing the IPO.

Ben Thompson, Foresight Group marketing director at the firm's UK office, told pv magazine: "We have binding commitments from the eight plants which are all in the UK."

Typically the finance group acquires operating PV plants with existing EPC and operations and maintenance contracts in place. Foresight can arrange construction finance where an EPC contractor would source the PV panels and other equipment, and instal them.

The group claims to have around £450 million of solar assets under management.

In May, two institutional investors – a British pension fund and an insurance company – invested £60 million in Foresight's index-linked listed solar bond, that the group says is "the largest such bond issued to date in the UK and listed on the London Stock Exchange."

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