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Wednesday, September 28, 2022
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Osborne Clarke advises Foresight on €28m Renewables refinancing

Osborne Clarke has counselled Foresight Group, a fund investing in a diversified portfolio of ground-based solar PV and battery storage assets in the UK and internationally, on a €28 million senior debt facility for the 98.5MW Lorca portfolio (Project Lorca) in Granada, Spain

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The senior debt facility will be provided by BayernLB and enables Foresight Solar to obtain a long debt structuring tenor. The interest rate is fixed at a competitive rate to the market. The debt facility enables Project Lorca to optimise its capital structure and deliver higher cash yields whilst complying with financial covenants and debt service coverage ratios.

Following this transaction, the company’s total outstanding debt is £538.0 million, representing approximately 45.9% of the Gross Asset Value (GAV) of the Company and its subsidiaries based on the company’s 31 December 2021 GAV of £1,172.0 million. This is within the 50% limit on the total gearing of the company’s GAV outlined in the prospectus.

The refinancing is the latest step in the development of Project Lorca which is currently under construction and is on track to be grid-connected and exporting electricity by June 2022. In late 2021, the Project entered into a ten-year fixed price Power Purchase Agreement (PPA) with Norway-based Statkraft, Europe’s largest producer of renewable energy. The PPA provides the portfolio with a long-term hedge for approximately 70% of its annual production and increases the Company’s revenue visibility.

Alfonso Martínez, investment manager at Foresight said: “Our excellent relationship with BayernLB has enabled us to deliver significant value for Foresight Solar as the facility has been secured on attractive terms, optimising the capital structure of the Fund.  This financing demonstrates that debt markets in Spain remain very active and are evolving towards more tailor-made solutions.”

Karin Schramm, sector head of Renewable Energy Europe at BayernLB, commented: “We are very pleased to be able to support Foresight once more through our commitment to their growth strategy in the current market environment, demonstrating once again our expertise and structuring competence in the fast-growing renewables sector.”

Osborne Clarke’s team was led by partners Luis Castro (Energy & Utilities) and Eduard Arruga (Banking & Finance), along with associates Blanca Montero (Energy & Utilities), Juan Luis Juez (Banking & Finance), and Ana Isabel Lozano (Real Estate). Also were involved in the transaction: Alejandra Ilarza, Juan López-Dóriga and Jesús Serna (Banking & Finance) and Marta Sancho (Energy & Utilities).

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