Foresight falls short with £39m raise following Australian expansion

The fund had been targeting proceeds above £75m to partly finance its maiden deals Down Under. But a spokeswoman indidcated its top investors might have over-allocated in past share placings and may 'not yet be comfortable' with the fund's Australian investments, its first outside of the UK.

London-listed Foresight Solar Fund has raised £39 million ($51.2 million; €44.1 million) following a share placing, falling short of its target of over £75 million.

The placing, announced two weeks ago, was intended to pay down debt used to fund its recent A$104 million ($79.8 million; €68.8 million) expenditure on four assets in Australia, with a planned total capacity of 227MW, as well as to fund future UK and overseas investments.

A spokeswoman for the fund told Infrastructure Investor the shortfall was partly attributable to reticence from its top investors. That reticence comes from having been over-allocated in past share placings, but she added that some might “not yet be comfortable” with the Australian investments, the fund’s first outside of the UK.

The Australian deals are a 48.5 percent acquisition of the 110MW Bannerton Solar Farm, an investment made alongside a fund managed by the Korean Development Bank and Hanwha Energy Corporation. The transaction was followed by Foresight buying 49 percent interests in the 17MW Longreach site and the 30MW Oakey 1 project and 100 percent of the 70MW Oakey 2 solar farm.

Bannerton had agreed a 17-year fixed-price power-purchase agreement with retailer Alinta Energy, for part of the electricity it produces, while a portion will be sold on the open market. Longreach and Oakey 1 have entered into 20-year fixed-price agreements for all of their electricity produced and Oakey 2 is expected to agree a contract at a later date.

All four of the acquired assets remain under construction and the Foresight spokeswoman said the fund expects interest to return once the assets are built. The projects bring the Foresight fund’s total portfolio in both the UK and Australia to 645MW.