BlackRock divests French solar portfolio to Samsung-led consortium

The 14 operating assets mark the first realisation for BlackRock’s Global Renewable Power Fund I, with GRP II 80% deployed and a third vehicle in the series earmarked for 2019.

BlackRock Real Assets has begun realising investments it made through Global Renewable Power Fund I, a vehicle it closed on $611 million in 2013, by selling a portfolio of 14 operating solar plants located across France with a combined generating capacity of 119.5MW.

A consortium led by Samsung Securities, which is acting as financial investor, and includes Seoul-based Samchully Asset Management as asset manager, have agreed to acquire the portfolio, which BlackRock built out by aggregating individual projects from 2013 through 2015.

Financial terms of the transaction were not disclosed.

“GRP I is now at the start of its realisation phase, now just over six years into its term,” Geeta Kana, a spokeswoman for BlackRock told Infrastructure Investor. “We are actively exploring attractive exit opportunities for GRP I over the coming months and years, and have taken the first step with the French solar portfolio.”

GRP I’s successor, which closed on $1.65 billion last year, is now 80 percent deployed in 14 wind and solar power generation investments representing more than 150 underlying individual projects in North America, Europe and Asia-Pacific. “BlackRock Global Renewable Power are now exploring the third vintage in the GRP series for 2019,” Kana added.

BlackRock’s Global Renewable Power platform currently has more than $5 billion in AUM across more than 250 wind and solar projects around the world, Kana explained. In August 2017, the fund manager made its first investment in Australia’s renewables sector, acquiring a 90 percent stake in a 200MW portfolio, comprising two under-construction solar farms in Queensland through GRP II. The plants were scheduled to begin commercial operations last August.

In addition to GRP I & II, the platform also includes BlackRock Renewable Income UK, an open-ended fund initially launched in 2014, which in July 2017 raised an additional £475 million ($605 million; €533.7 million) making it the largest renewables fund in the country with a total exceeding £1.1 billion; and BlackRock Renewable Income Europe, a €650 million fund that closed in 2016.

For Samchully, which originated and initiated the transaction according to a spokesman for the firm, and which to date has focused on the North American market, the deal represents the Korean asset manager’s foray into the French market.

“In the North American market, there are less and less long-term contracted assets [with] PPAs or off-take agreements, regardless of gas-fired power plants or renewable power plants,” Samchully’s spokesman Won Jong Choi told Infrastructure Investor.

“The period of PPAs for renewable power plants [in North America] is getting shorter – from 20 years to 15 years, from 15 years to approximately 10 to 12 years,” he said. “But, in the European market, there are still many opportunities with 20-year, long-term contracted assets,” Choi continued, adding that Samchully will continue exploring the European renewables sector for more opportunities.

Korean LPs are also interested in European renewables, he said, as they are more risk-averse and “highly cautious investors [who] prefer to invest into contract-based assets”.

While Choi declined to comment on the purchase price, he explained that a new vehicle, “a type of trust fund”, will be created with Samsung Securities, the sole underwriter of the transaction, the only beneficiary.

The transaction is expected to close in early 2019, BlackRock’s spokeswoman said.