New solar fund says investment round will be completed by the end of the first quarter
Foresight Group has revealed it is on track to invest £150m in UK solar farms by the end of March, after the company confirmed the first project acquired by its new Solar Fund is already exceeding expectations.
Investment firm Foresight Group completed a £150m initial public offering (IPO) for its Foresight Solar Fund last autumn, raising funds for its planned investment in a fleet of solar farms.
The company said at the time that it had lined up eight projects that would allow it to invest up to 100 per cent of the fund and yesterday it provided an update on the progress to date, confirming that it is close to committing all of the money raised.
Most notably, the company said its first investment, the 32MW Wymeswold solar park that has been built on a disused airfield in Leicestershire, was exceeding expectations. Despite the poor weather in recent months, the solar park has generated 15 per cent more power than expected between November last year and 22 January this year.
The company also confirmed that two further projects announced in its prospectus, the Castle Eaton and High Penn solar parks, are due to be connected to the grid in the next few weeks, adding a further 28MW of capacity to the fund's portfolio.
"The company remains on target to have all IPO proceeds invested in grid-connected, operational assets by the end of Q1 2014," it added.
Jamie Richards, partner and head of infrastructure at Foresight, said the early indications from the fund's initial projects were hugely encouraging. "The Wymeswold asset outperformance is good news," he said. "Thirty per cent of the IPO proceeds were invested in this fully operational asset shortly after the IPO and the asset was selected because of its potential to outperform."
He added that with 100 per cent of the fund's assets due to be fully operational by the end of March, it remained confident it would be able to deliver investors the promised level of returns.
"We remain on target to deliver the 6p dividend per ordinary share," he said. "The promising outlook for the UK solar sector, the quality of the underlying assets and Foresight's track record in the sector continue to provide investors with an attractive opportunity to secure inflation linked yield and potential for capital growth."
Foresight is one of a number of investment firms seeking to mobilise investment in solar farm projects. They offer institutional investors relatively attractive returns as the cost of the technology falls and the government promises a stable policy environment over the rest of this decade.
Only last week, NextEnergy became the latest firm to announce plans to raise £150m for solar investment through a listing on the London Stock Exchange.
Jersey-based investment fund aims to snap up wind projects across Europe
The world's largest ever trade deal is also the first Europe has signed that commits both parties to upholding the UN climate accord
As largest green bond to be listed on London Stock Exchange launches, City Minister and Economic Secretary to the Treasury John Glen sketches out green finance blueprint for the UK
Ed King argues that last week's industry summit revealed how too many insurers want to tackle climate risks while still investing in carbon intensive assets