Bluefield Solar Inc. - Strategic Partnership with GLIL Infrastructure

Bluefield Solar Income Fund

22/12/2023 07:00

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RNS Number : 6946X  Bluefield Solar Income Fund Limited  22 December 2023

22 December 2023

 

Bluefield Solar Income Fund Limited

('Bluefield Solar' or the 'Company')

 

Strategic Partnership with GLIL Infrastructure ('GLIL')

Agreement set to enhance income diversification and facilitate de-leveraging

 

·    Bluefield Solar to invest £20 million of equity, alongside £200
million from GLIL, into a UK based solar portfolio and repay £10 million of
the Company's Revolving Credit Facility ('RCF').

 

·    Provisional agreement for GLIL to acquire a 50% stake in a portfolio
in excess of 100MW currently owned by Bluefield Solar, in line with current
valuation, in early 2024.

 

·    Strategic partnership agreement provisionally committing Bluefield
Solar and GLIL to funding a selection of the Company's development pipeline.

 

Bluefield Solar (LON: BSIF), the London listed UK income fund focused
primarily on acquiring and managing solar energy assets, is pleased to
announce the signing of a Memorandum of Understanding ('MOU') with GLIL
regarding the formation of a long-term strategic partnership ('Strategic
Partnership') which commits 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
£3 billion portfolio of infrastructure assets.

 

There are three distinct phases to the Strategic Partnership:

 

In phase one, the Strategic Partnership has agreed the acquisition of a 247MW
portfolio of UK solar assets from Lightsource bp (the 'Lightsource bp
Portfolio').  The Lightsource bp Portfolio is predominantly diversified
across southern and central England and comprises 58 operating sites: 184MW
backed by Feed in Tariff ('FiT') subsidies, 15MW by Renewable Obligation
Certificates ('ROCs') and two subsidy free projects totalling 48MW.  Through
the period 2023 to 2035 the proportion of fixed and regulated revenues from
the portfolio is projected to be approximately 80%.  The acquisition raises
the level of regulated revenues in the Bluefield Solar portfolio, whilst also
increasing the proportion of FiT income.

 

Bluefield Solar is investing £20 million, or 9% of the equity, with GLIL
investing the balance.  The Company will fund the acquisition using earnings
which arose in the financial year ended 30 June 2023, after the payment of
dividends, debt amortisation and the Electricity Generator Levy ('EGL').  In
addition, Bluefield Solar will use a further £10 million of earnings to pay
down a portion of the Company's RCF.  Total retained earnings before this
announcement were approximately £60 million.  Following the Lightsource bp
Portfolio acquisition and the partial repayment of the RCF, the Company's UK
holding companies' RCF balance will stand at £167 million, with long term
amortising debt being £430 million.  Overall, the Company's UK holding
companies and its subsidiaries have total outstanding debt of £597 million,
with a leverage level of circa 41% of Gross Asset Value (broadly unchanged
from 30 June 2023).

 

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 Company ('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.  The sale of a stake in
the Bluefield Portfolio, as described, will provide Bluefield Solar with
additional liquidity, the proceeds of which provide the opportunity to
continue to pay down the drawn RCF.

 

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).

 

John Scott, Chair of Bluefield Solar, said: "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 ten years.  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."

 

James Armstrong, Managing Partner, Bluefield Partners, Investment Adviser to
Bluefield Solar, said: "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."

 

Chris Rule, Member of the GLIL Infrastructure Executive Committee, 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."

 

- Ends -

 

 

 For further information:

                                                           Tel: +44 (0) 20 7078 0020

                                                         www.bluefieldllp.com (http://www.bluefieldllp.com/)
 Bluefield Partners LLP (Company Investment Adviser)
 James Armstrong / Neil Wood / Giovanni Terranova

 Deutsche Numis (Company Broker)                           Tel: +44 (0) 20 7260 1000
 Tod Davis / David Benda / Matt Goss                       www.dbnumis.com (http://www.numis.com/)

 Ocorian                                                   Tel: +44 (0) 1481 742 742

(Company Secretary & Administrator)                      www.ocorian.com (http://www.ocorian.com/)
 Chezi Hanford

 Media enquiries:                                          Tel: +44 (0) 20 7466 5000

Buchanan (PR Adviser)                                    www.buchanan.uk.com (http://www.buchanan.uk.com/)
 Henry Harrison-Topham / Henry Wilson                      BSIF@buchanan.uk.com (mailto:BSIF@buchanan.uk.com)

 GLIL Infrastructure

 Citypress                    www.citypress.co.uk (http://www.citypress.co.uk)
 Justin Moll                  glil@citypress.co.uk (mailto:glil@citypress.co.uk)

 

 

About Bluefield Solar

 

Bluefield Solar is a London listed income fund focused primarily on acquiring
and managing solar energy assets.  Not less than 75% of the Company's gross
assets will be invested into UK solar assets.  The Company can also invest up
to 25% of its gross assets into other technologies, such as wind and storage.
Bluefield Solar owns and operates a UK portfolio of 812MW, comprising 754MW of
solar and 58MW of onshore wind.

 

Further information can be viewed at www.bluefieldsif.com
(http://www.bluefieldsif.com/)

 

About Bluefield Partners

 

Bluefield Partners LLP was established in 2009 and is an investment adviser to
companies and funds investing in renewable energy infrastructure.  It has a
proven record in the selection, acquisition and supervision of large-scale
energy assets in the UK and Europe.  The team has been involved in over £6.5
billion renewable funds and/or transactions in both the UK and Europe,
including over £1 billion in the UK since December 2011.

 

About GLIL Infrastructure

 

GLIL is a partnership of UK pension funds which invests in Britain's future -
creating jobs, supporting communities and helping to power the economy.  It
is a proven investor, with a fund specially designed to help pension fund
members tap into the stable, inflation-linked returns that infrastructure
investment offers. GLIL manages £3.6 billion of committed capital, with more
than £3.0 billion deployed into a growing portfolio of infrastructure assets
spanning renewable energy, energy storage, utilities ports, trains, hospitals
and schools. It invests on behalf of Local Government Pension Scheme DB funds
and pools including Local Pensions Partnership Investments, Greater Manchester
Pension Fund, Merseyside Pension Fund, West Yorkshire Pension Fund, as well as
Nest, the government-established Defined Contribution workplace pension
provider. For more information on GLIL, including its history, executive
committee and investment portfolio, please visit www.glil.co.uk
(https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fprotect-eu.mimecast.com%2Fs%2FhGbsCRMVBfKEG1fNuR0B%3Fdomain%3Deur01.safelinks.protection.outlook.com&data=05%7C01%7Cjamie.williamson%40citypress.co.uk%7C1b00971c34cc40677e6a08daf7abb372%7Cde7b31aa5df545528da7af3278edfccd%7C0%7C0%7C638094614075291213%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=bEcu8upaWZ6tOpbGny8hfer4SacBilxpkPfuFtOp5FM%3D&reserved=0)
.

 

About Lightsource bp

 

Lightsource bp is a global leader in the development and management of solar
energy projects. Most recently, bp has announced the intention to fully
acquire Lightsource bp. It is currently operated as a 50:50 joint venture with
bp. Our purpose is to deliver affordable and sustainable solar power for
businesses and communities around the world. For more information on
Lightsource bp, please visit www.lightsourcebp.com.

 

 

 

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