HSIL fund invests £30m in UK domestic solar project

The €235m HSBC Environmental Infrastructure Fund is investing in a project headed by renewable energy firm Eaga. The investment reflects enthusiasm for the UK government’s push for new homes to embrace solar power.

HSBC Specialist Investments (HSIL), the infrastructure and real estate arm of HSBC, has agreed to invest £30 million (€34 milion; $49 million) for a 40 percent stake in a rooftop solar project that will provide photovoltaic systems for 30,000 homes in the UK. The investment will be made through HSIL’s HSBC Environmental Infrastructure Fund (HEIF).

The systems will be installed and operated by Eaga, which claims to be the UK’s largest supplier of heating and renewable energy. A statement from HSIL said that Carillion, the UK developer which agreed to buy Eaga for £306 million in February this year, was “highly supportive” of the project and had endorsed its signing.

HEIF fund manager James Hall-Smith said in the statement that solar was “an important area of focus” for HEIF, “particularly in the UK, where the government’s domestic renewable energy targets provide a compelling reason for investment in this area”. The government has set strict planning targets for newly built homes, with all new developments needing to make use of renewable sources for at least 10 percent of their energy.

HEIF is a €235 million fund which invests in the development, construction and early operational phase of infrastucture projects in sectors including renewable energy, water treatment and waste.

In the summer of 2010, the senior management of HSIL agreed terms with HSBC to acquire 80 percent of the fund management business, with HSBC retaining 20 percent. The deal completed sale and purchase documentation in December but is awaiting regulatory approvals expected by the end of this month.