NextEnergy Capital has secured debt financing to build two subsidy-free solar plants in the UK with 115MW capacity.
The investment company has agreed a non-recourse debt financing structure of £100m with Santander to cover investment into the two projects, Llanwern, a 75MW plant based in South Wales, and Strensham, a 40MW plant in Worcestershire.
These landmark projects will be built on a subsidy-free basis, with Llanwern being the largest subsidy free plant and also the largest solar farm in the UK to date, the company said.
Their constructed value is expected to be in excess of £60m, with connection to the grid planned for both in the final quarter of 2020. Both projects will be contracted with Power Purchase Agreements.
NEC said it has a long-term hold strategy for these projects and it is the intention that these two solar farms will be moved to a new subsidy-free private fund, NextPower UK ESG, which will target a significant number of new-build subsidy-free solar projects focused exclusively on the UK.
Chief executive and founding partner Michael Bonte-Friedheim said: “It’s a pleasure to announce this innovative new financing structure and the commencement of construction on further critical energy generating assets to be delivered on a subsidy-free basis.
“NEC group’s mission is to generate a more sustainable future by leading the transition to clean energy and these assets underline our wherewithal to pursue and deliver on it.
“The ability for NEC to work with its partner Santander to implement this transaction considering the extremely challenging backdrop of COVID-19 lockdown shows the strength and depth of the teams involved, coupled with the resilience of solar as an asset class in these times.”
Santander Corporate and Investment Banking’s Alejandro Ciruelos added: “We are delighted to support NextEnergy Capital with the financing of the zero-subsidy solar projects. This is a ground-breaking transaction and an important step forward in making subsidy-free renewables viable in the UK.”