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Lightsource Renewable Energy closes £284m Senior and Mezzanine Refinancing

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Lightsource Renewable Energy Holdings and its financial adviser, The Royal Bank of Scotland, have announced the successful £284m refinancing of a portfolio of UK solar projects, owned and operated by Lightsource.  The 101 megawatt portfolio consists of 33 operational, UK based, ground-mounted solar projects which attract 20-25 year fixed income tariffs under the UK Government’s Feed in Tariff subsidy regime.

Lightsource, a European solar energy company, is the largest developer, asset manager and operator of utility scale solar in the UK, currently managing an operational portfolio of more than 1 gigawatt – capable of generating enough to power more than 330,000 UK households each year.  The portfolio, distributed across central and southern UK, became operational throughout 2011-2015 and was previously financed by a combination of multiple bank loans.

Lightsource has raised over £1.1bn of project finance debt during 2015 and this transaction represents Lightsource’s first move into the long-dated institutional market, completing the first ever sterling, benchmark-size solar bond and the largest sterling renewables bond. M&G Investments provided £247 million of 22-year inflation linked finance with AMP Capital providing a £37 million 8-year mezzanine facility . The transaction, priced via RBS, demonstrates M&G and AMP Capital’s continued commitment to financing in the solar sector.

Paul McCartie, Structured Finance Director at Lightsource, said: “We are delighted to have closed this deal which represents a significant milestone for Lightsource. We would like to thank M&G and AMP Capital for their continued support on the transaction and hope that we can maintain those partnerships with future deals in the pipeline. We have raised over £1.1bn of project financing this year which is an amazing achievement and wouldn’t have been possible without the support of the lenders and advisors who work with us.”

Craig Love, Director, Infrastructure and Structured Finance, RBS, said: “We are pleased that our sector and execution expertise, together with our international distribution network, were able to help deliver this landmark transaction for Lightsource.  RBS has been at the forefront of the UK solar market since its inception in 2010, has funded 1.2GW of projects to-date and retains a strong pipeline of solar projects going forward.”

John Mayhew, Head of Infrastructure Finance at M&G Investments, said: “Consolidation within the solar sector is providing investable opportunities for institutional clients. We have structured the deal to deliver inflation-linked returns, with good security to ensure risks are appropriately rewarded.

“The injection of a quarter of a billion pounds of long term institutional financing will enable Lightsource to grow and develop further sites across the UK. The latest deal brings M&G’s debt investment into the sector to over £385 million in the past 12 months, providing power for the equivalent of almost 90,000 average-sized homes.”

Emma Haight-Cheng, Debt Principal at AMP Capital Infrastructure, said: “We are excited to have closed this critical transaction with Lightsource and are looking forward to strengthening our partnership with Europe’s leading solar energy company. I am delighted that AMP Capital was able to deliver an innovative and responsive financing solution for Lightsource.  This transaction demonstrates AMP Capital’s ability to capitalise on the strength of its market relationships and bring flexible financing structures to a wide range of sectors.”

M&G and AMP Capital were advised by Clifford Chance and Norton Rose Fulbright respectively (Legal), Watson Farley Williams (Legal DD), DNV GL, OST and Sgurr (Technical), Willis (Insurance) and Operis (Model Audit).  Dentons (Legal), Deloitte (Tax & Structuring) and RBS (Financial) advised Lightsource.

Energy

Responsible Energy Investments Could Solve Retirement Funding Crisis

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Energy Investments
Shutterstock / By Sergey Nivens | https://www.shutterstock.com/g/nivens

Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.

Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long will my retirement savings last?”

Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.

Tip #1: Focus & Determination

Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.

Tip #2: Minimize Spending

One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!

Tip #3: Visualize Your Goal

You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.

Investing in Clean Energy

One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.

With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.

The Future of Green Biz

As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.

Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.

In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!

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Energy

What Should We Make of The Clean Growth Strategy?

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Clean Growth Strategy for green energy
Shutterstock Licensed Photo - By sdecoret | https://www.shutterstock.com/g/sdecoret

It was hardly surprising the Clean Growth Strategy (CGS) was much anticipated by industry and environmentalists. After all, its publication was pushed back a couple of times. But with the document now in the public domain, and the Government having run a consultation on its content, what ultimately should we make of what’s perhaps one of the most important publications to come out of the Department for Business, Energy and the Industrial Strategy (BEIS) in the past 12 months?

The starting point, inevitably, is to decide what the document is and isn’t. It is, certainly, a lengthy and considered direction-setter – not just for the Government, but for business and industry, and indeed for consumers. While much of the content was favourably received in terms of highlighting ways to ensure clean growth, critics – not unjustifiably – suggested it was long on pages but short on detailed and finite policy commitments, accompanied by clear timeframes for action.

A Strategy, Instead of a Plan

But should we really be surprised? The answer, in all honesty, is probably not really. BEIS ministers had made no secret of the fact they would be publishing a ‘strategy’ as opposed to a ‘plan,’ and that gave every indication the CGS would set a direction of travel and be largely aspirational. The Government had consulted on its content, and will likely respond to the consultation during the course of 2018. And that’s when we might see more defined policy commitments and timeframes from action.

The second criticism one might level at the CGS is that indicated the use of ‘flexibilities’ to achieve targets set in the carbon budgets – essentially using past results to offset more recent failings to keep pace with emissions targets. Claire Perry has since appeared in front of the BEIS Select Committee and insisted she would be personally disappointed if the UK used flexibilities to fill the shortfall in meeting the fourth and fifth carbon budgets, but this is difficult ground for the Government. The Committee on Climate Change was critical of the proposed use of efficiencies, which would somewhat undermine ministers’ good intentions and commitment to clean growth – particularly set against November’s Budget, in which the Chancellor maintained the current carbon price floor (potentially giving a reprieve to coal) and introduced tax changes favourable to North Sea oil producers.

A 12 Month Green Energy Initiative with Real Teeth

But, there is much to appreciate and commend about the CGS. It fits into a 12-month narrative for BEIS ministers, in which they have clearly shown a commitment to clean growth, improving energy efficiency and cutting carbon emissions. Those 12 months have seen the launch of the Industrial Strategy – firstly in Green Paper form, which led to the launch of the Faraday Challenge, and then a White Paper in which clean growth was considered a ‘grand challenge’ for government. Throughout these publications – and indeed again with the CGS – the Government has shown itself to be an advocate of smart systems and demand response, including the development of battery technology.

Electrical Storage Development at Center of Broader Green Energy Push

While the Faraday Challenge is primarily focused on the development of batteries to support the proliferation of electric vehicles (which will support cuts to carbon emissions), it will also drive down technology costs, supporting the deployment of small and utility-scale storage that will fully harness the capability of renewables. Solar and wind made record contributions to UK electricity generation in 2017, and the development of storage capacity will help both reduce consumer costs and support decarbonisation.

The other thing the CGS showed us it that the Government is happy to be a disrupter in the energy market. The headline from the publication was the plans for legislation to empower Ofgem to cap the costs of Standard Variable Tariffs. This had been an aspiration of ministers for months, and there’s little doubt that driving down costs for consumers will be a trend within BEIS policy throughout 2018.

But the Government also seems happy to support disruption in the renewables market, as evidenced by the commitment (in the CGS) to more than half a billion pounds of investment in Pot 2 of Contracts for Difference (CfDs) – where the focus will be on emerging rather than established technologies.

This inevitably prompted ire from some within the industry, particularly proponents of solar, which is making an increasing contribution to the UK’s energy mix. But, again, we shouldn’t really be surprised. Since the subsidy cuts of 2015, ministers have given no indication or cause to think there will be public money afforded to solar development. Including solar within the CfD auction would have been a seismic shift in policy. And while ministers’ insistence in subsidy-free solar as the way forward has been shown to be based on a single project, we should expect that as costs continue to be driven down and solar makes record contributions to electricity generation, investment will follow – and there will ultimately be more subsidy-free solar farms, albeit perhaps not in 2018.

Meanwhile, by promoting emerging technologies like remote island wind, the Government appears to be favouring diversification and that it has a range of resources available to meet consumer demand. Perhaps more prescient than the decision to exclude established renewables from the CfD auction is the subsequent confirmation in the budget that Pot 2 of CfDs will be the last commitment of public money to renewable energy before 2025.

In short, we should view the CGS as a step in the right direction, albeit one the Government should be elaborating on in its consultation response. Its publication, coupled with the advancement this year of the Industrial Strategy indicates ministers are committed to the clean growth agenda. The question is now how the aspirations set out in the CGS – including the development of demand response capacity for the grid, and improving the energy efficiency of commercial and residential premises – will be realised.

It’s a step in the right direction. But, inevitably, there’s much more work to do.

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