Abrdn has invested £31m on behalf of its strategic partner Phoenix Group in the refinancing of CORE Portfolio Investments, a 36MW portfolio of ground-mounted solar assets located in South and West England and Wales.
The financing was arranged by Finance Earth, a UK environmental impact investment advisor and lead advisor to CORE.
CORE is a £50m social investment partnership structured by Finance Earth, with investment from Big Society Capital and charitable trust Power to Change.
CORE was established to acquire operational solar farms with the principal objective of turning these into community owned assets, with a mission is to support the acquisition, restructuring and optimisation of community energy assets, while working to maximise the collective environmental, social and financial benefits for local communities where the assets are based.
Since 2018, it has provided £300,000 of funding to support charitable and local community projects with grants.
Seven of the eight sites within the portfolio receive guaranteed income through the Feed-in Tariffs (FIT) scheme - a government programme designed to promote the uptake of renewable and low-carbon electricity generation technologies - and the Renewables Obligation (RO) scheme - which supports the generation of renewable electricity. The latter operates as a market-based mechanism through a system of tradable green certificates called Renewables Obligation Certificates (ROCs).
The financing also includes an unsubsidised site, supported by attractive Power Purchase Agreement offtakes.
Abrdn is providing RPI-linked debt, fully amortising over a 15-year tenor. The structure also includes a comprehensive ESG reporting package, enabling measurement of the future impact of the portfolio and ensuring alignment with future Sustainable Finance Disclosure Regulation (SFDR) and UK taxonomy reporting.
The transaction aims to inject long-term institutional financing into the community renewable energy sector.
Alex Campbell, investment director for infrastructure debt at abrdn, commented: “The investment was made on behalf of our strategic client, Phoenix Group, which will support them with secured, long-term, inflation-linked cash flows they need to support their future liability obligations.
“The measurable social impact of the CORE portfolio is central to our investment thesis.”
Rich Speak, co-founder and managing director of Finance Earth, added: “We believe the facility has been secured at an attractive rate and optimises the capital structure of the fund and its underlying projects abilities to generate surplus community profits”
CORE was advised by Finance Earth and Burges Salmon, while abrdn was advised by Osborne Clarke, Mazars, Gallagher and Everoze.
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