Bluefield Solar has announced the signing of a Memorandum of Understanding with GLIL regarding the formation of a long-term strategic partnership committing both parties to investing together into UK focused solar assets, from development through to operational plants.
GLIL is a partnership of UK pension funds, investing into core UK infrastructure, including Local Pensions Partnership Investments, Greater Manchester Pension Fund, Merseyside Pension Fund, West Yorkshire Pension Fund and Nest, and has a £3bn portfolio of infrastructure assets.
The strategic partnership comprises three distinct phases.
In phase one, it has agreed the acquisition of a 247MW portfolio of UK solar assets from Lightsource bp.
The projects are predominantly diversified across southern and central England and comprise 58 operating sites: 184MW backed by Feed in Tariff (FiT) subsidies, 15MW by Renewable Obligation Certificates and two subsidy-free projects totalling 48MW.
The acquisition is conditional on the joint venture between Bluefield Solar and GLIL being an approved buyer under the National Security and Investment Act 2021 as the parties have a combined portfolio generation capacity of over 1GW. This is expected in January 2024.
In phase two, GLIL has provisionally agreed to acquire a 50% stake in a portfolio of more than 100MW of operational UK solar assets currently owned by the Bluefield Portfolio. The provisional acquisition price is in line with the company’s current valuation. The strategic partnership intends to reach financial close in the first half of 2024.
In phase three, Bluefield Solar and GLIL intend via the strategic partnership to commit capital in a selection of the company’s development pipeline, assuming market conditions are supportive. The identified development assets are expected to be grid connected over the next two to three years.
The Board of Bluefield Solar reiterates its guidance of a raised full year dividend of not less than 8.80pps for the period ending 30 June 2024 (increased from 8.60pps paid for the period ended 30 June 2023).
“Current capital market conditions make it difficult for us to raise new capital using the instruments which have served the company and its shareholders well through the past 10 years,” said. Bluefield Solar chair John Scott.
“In response, the Bluefield Solar board has been evaluating how best to continue our development programme, while maximising value for our shareholders over the long term. “The strategic partnership with GLIL is an exciting and significant development for the company; it creates the opportunity for both parties to invest in the sizeable renewable energy pipeline which our Investment Adviser has identified, while responding to shareholder feedback in reducing our short-term debt position.
“The world is crying out for more solar power and COP28 has called for a tripling of capacity by 2030. We see tremendous potential in this partnership as a means to help Bluefield Solar play its part in achieving this goal.”
Bluefield Partners, investment adviser to Bluefield Solar, managing partner James Armstrong added: “We have been listening to feedback from our shareholders and the strategic partnership with GLIL enables us to deliver on a number of key areas simultaneously: to continue to keep investment momentum in a difficult time for public market infrastructure funds and judiciously diversify the portfolios revenues; to provide an additional external validation of asset values; to create additional liquidity and lower the company’s overall debt burden; and to partner with a like-minded investment group.
“As a long-term investor into solar assets, GLIL is the ideal partner for a company like Bluefield Solar, sharing our multi-decade view of asset management.
“We have always focused on the long-term interests of the shareholders, and we believe this strategic partnership can deliver short-term solutions and long-term benefits to Bluefield Solar investors.”
Member of the GLIL infrastructure executive committee Chris Rule said: “Entering into a long-term strategic partnership with one of the most respected and leading asset owners in this sector is very exciting for GLIL.
“Being able to acquire and develop further renewable energy assets is very important for our Members, all of whom are deeply committed to investing in the energy transition and working towards a sustainable net zero economy.”