BlackRock buys UK solar farm from SPI

The investment is the third from BlackRock’s Renewable income UK fund, which held an initial close in December last year at £500 million.

Shanghai-based developer Solar Power (SPI) announced this week that it had entered into a definitive agreement to sell the entire capital of Solar Park Developments 3, which holds a solar project in the UK with a capacity of about 9.5 megawatts (MW), to BlackRock’s UK renewable income fund.

SPI’s sale follows the announcement last week that the company was entering a programme to repurchase up to $50 million of its common stock over the next six-month period as well as the signing by its wholly-owned subsidiary Jiangsu Solarbao Leasing (Solarbao) of a cooperation agreement with Chinese solar operator Kong Sun Holdings, under which it will provide finance lease services to the company's power system projects.

“We are very pleased to work with SPI on this long-term, all-equity investment in the Grange Farm solar power project, part of BlackRock's significant investment programme in the UK renewables sector,” commented Rory O'Connor, a managing director at BlackRock. 

The Grange Farm solar project is located in Kirkby-on-Bain, Lincolnshire, and will form one of the holdings of the BlackRock Renewable Income UK Fund, managed by BlackRock's Infrastructure Investment Group. The project commenced construction in the first quarter of this year and was connected to the grid in March. It is eligible to receive Renewables Obligation Certificates (ROCs) at 1.4 ROCs per megawatt-hour for 25 years under the UK's Renewables Obligation scheme.

The investment from BlackRock Infrastructure Investment Group was made through the BlackRock Renewable income UK (BRI-UK) open-ended fund, which held an initial close in December last year at £500 million (€686 million; $775 million).

“The open-ended fund, currently closed, will reopen for investors when the capital from the December 2014 close is substantially invested,” said a spokesperson to the firm.

“This is an income-focused fund that deploys unlevered capital in the UK only with a buy-and-hold approach,” the spokesperson added. It is a separate entity from BlackRock’s NTR Renewable Power Fund, a platform closed in 2013, from which the $611 million it raised along with the additional pool of co-investment capital are almost fully invested in a portfolio of 36 wind and solar projects in the United States, Canada, Ireland, England, France and Sweden.

BlackRock’s infrastructure group manages about $6.5 billion in investor commitments spread across a variety of strategies across infrastructure debt and infrastructure equity. The Renewable Power platform is a central pillar of the overall infrastructure unit, according to the spokesperson.