BlackRock and Lightsource enter a £1B UK solar partnership

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Lightsource and BlackRock Real Assets have entered in to a strategic partnership which is targeting the acquisition and ownership of UK solar power generation assets with an anticipated aggregate enterprise value of £1 billion (US$1,3 billion).

The solar assets represent a total target installed capacity of circa 1GWp. The newly created partnership, called Kingfisher, aims to consolidate the secondary UK solar market.

BlackRock has seeded the partnership with the acquisition of 90% stake in 25 asset newly-constructed ROC and CFD portfolio from Lightsource with an installed capacity of 156 MWp. Lightsource will add a further c. 50MWp of Northern Ireland ROC assets later this year, once operational.

Lightsource and BlackRock Real Assets will target the acquisition of operational utility scale solar assets in the UK over a three-year period. Kingfisher has both a levered and unlevered strategy, with the seed assets funded under the levered structure, with RBS providing project finance with an accordion feature for future acquisitions. Kingfisher will look to target both levered and unlevered asset opportunities.

Lightsource Chief Investment Officer, Paul McCartie, said:

“We’re incredibly excited about this partnership with such an established and prestigious investor as BlackRock in the UK. Kingfisher is confirmation of our proven differentiation as a professional partner to institutional capital globally, and ability to create profitable and sustainable investment opportunities in the solar and energy broader market. By leveraging economies of scale, Lightsource can provide cost efficiencies and better returns as we acquire UK solar plants and operate them as part of our growing global portfolio. This is the clear differentiator between Lightsource and many other solar companies”.

Rory O’Connor, Managing Director and Head of Renewable Power for Europe at BlackRock said:

“We are pleased to partner with Lightsource in the creation of this new UK solar portfolio.  Over the last two years, we have invested in more than 20 solar projects in the UK representing nearly 150-megawatt of capacity on behalf of our clients, and we believe this market continues to present attractive opportunities for institutional investors. In working closely together with Lightsource as a leading developer and operator of solar projects we are confident to realize a lot of additional potential in the market.”

As we recently reported, Blackrock acquired 49% sponsor-partner interest in the 200-MW Flat Top wind project in Texas and will co-own the project with Alterra. This transaction contributed to reach the financial close for the project. 

Additionally, the company also announced the agreement to acquire 115 MW Svartnäs wind farm from Arise. Arise will manage the construction and once operational, manage the project on behalf of BlackRock through a construction and asset management agreement.

In March, we also informed that a fund managed by BlackRock Real Assets  completed the acquisition of  two construction ready wind projects in the UK from REG Power Management. The transaction involved the 13 MW wind farm, Hallburn located in Cumbria and the 6 MW Pen Bryn Oer wind farm located in Wales.

Over the last years, BlackRock has invested in 29 renewable energy projects in the UK representing over 381 MW of capacity, generating enough renewable energy to power over 167,000 homes annually. This transaction is part of a long-standing partnership with RPM who will continue to provide long-term operations and asset management services for these projects. 

BlackRock operates one of the largest renewable power investment platforms in the world and has invested equity capital in 100 renewable power projects in recent years. To date, BlackRock Real Assets has a total invested portfolio of approximately 2.6 GW of generating capacity across wind and solar projects located in the USA, Canada, Ireland, Japan, Sweden, Norway, France and the UK.

We have lately informed about other solar projects in the UK:

• Vortex's 365 MW UK solar portfolio
• 4.99 MW Wasing solar farm in Berkshire
• 4.99 MW Rampisham solar farm in Dorset
• 4.99 MW Hill solar farm in Oxfordshire
• 4.99 MW Flixborough solar farm in South Humberside
• 4.99 MW Aller Court solar farm in Somerset