Foresight Solar has announced the acquisition of its first Spanish solar asset, the consented 26.1 MW Virgen del Carmen solar farm, based in Huelva.
The project in the country’s south-west is the ground-based solar PV fund’s first acquisition on continental Europe and also represents its first investment in subsidy-free solar.
Construction of the project is expected to start at the end of September 2020, with operations targeted to start in the third quarter of 2021.
The acquisition will represent an investment of €20.2m (£18m) once construction is completed and will benefit from a long-term Power Purchase Agreement with Shell Energy Europe Limited, a subsidiary of Royal Dutch Shell Plc, for the sale of electricity under a fixed price until 2030, Foresight said.
The fund will implement a 10-year rolling EUR/GBP foreign currency hedging strategy covering the future cash flows generated by the asset to eliminate currency fluctuation exposure on returns.
Foresight said the acquisition, which will be funded using the company’s revolving credit facilities, had leveraged the regional expertise of its investment manager, Foresight Group, which through its offices located in Madrid manages an existing portfolio of renewable assets in Spain.
Commenting on the purchase, Foresight Solar chairman Alex Ohlsson said: “With a long-term, fixed price PPA in place and a high production profile, the acquisition is a clear demonstration of our ability to source and deliver stable cash flows at attractive risk-adjusted returns and marks an important step in Foresight Solar’s international expansion strategy.”
Following the deal Foresight’s portfolio comprises 55 assets, based in the UK, Australia and Spain, with an installed capacity of 895 MW.
Investments outside the UK represent approximately 12.5% of the GAV of the company and its subsidiaries.