The British solar PV portfolio owned by former SunEdison yieldco vehicle TerraForm Power is to be sold to Vortex, a Europe-based renewable energy investment platform managed by Egyptian investment bank EFG Hermes.
The portfolio comprises 365 MW of solar capacity, and will boost TerraForm Power’s coffers to the tune of around £470 million ($581 million) once the closing of the transaction is confirmed.
Comprising 24 individual ground-mounted solar farms, the portfolio is one of the largest in the U.K., and was built during the country’s solar boom years of 2014 and 2015 by SunEdison. The average age of each asset is two years, and each solar plant is eligible for the government-backed Renewable Obligation Certificate (ROC) and 14-year PPAs.
British renewable energy developer Lightsource, which manages more than 1.3 GW of solar assets, will act as a technical partner for Vortex, overseeing all O&M services post acquisition.
For Vortex, this acquisition augments its renewable energy generation capacity to 822 MW, totaling some $1.4 billion in clean power investments in Europe to date.
“This landmark acquisition caps a two-year period in which our private equity team has built Vortex from a newcomer into a platform managing 822 MW in net capacity across the United Kingdom, France, Spain, Belgium and Portugal, making it one of the largest renewable energy focused investment managers in Europe,” said EFG Hermes group CEO Karim Awad. “The transaction is also an example of our group’s announced merchant banking strategy of effectively utilizing our balance sheet to support our core businesses and enhance shareholder returns.”
The portfolio carries a project finance debt facility of approximately £300 million, and Vortex intends to refinance existing debt to help fund the purchase. Tenaga Nasional Berhad – an Asian utility – has subscribed into Vortex to fund half of the equity share capital association with the purchase. EFG Hermes will underwrite the remaining 50%, Vortex said.
For TerraForm Power, the sale is timely. In a financial filing published late last year, the company cited the proposed sale of its U.K. assets as a key portion of its breakeven forecast for 2017, with the firm eyeing revenues of $570 – $670 million for the year.