Macquarie Infrastructure Debt Investment Solutions (MIDIS) is lending £21.5 million (€29.3 million; $33.3 million) to renewable infrastructure asset manager Quercus Assets Selection to finance one of the UK’s largest solar plants.
The 19-year loan will cover both the construction and operations period and is split into index-linked and fixed-rate tranches. It will help fund a 113,000 solar panel ground-mounted plant covering 56,000 hectares in Wales. The plant will sell its power to Norwegian utility Statkraft via a 15-year power purchase agreement.
MIDIS senior vice president Kit Hamilton hinted the loan to Quercus might not be a one-off: “We worked closely with Quercus to understand their business needs, the construction risk and long dated maturity profile and look forward to rolling out this solution to other projects in their pipeline.”
Last year, MIDIS reached a £579 million (€729 million; $909 million) first close for what it is calling the UK’s first inflation-linked infrastructure debt fund. The fund complements a series of separately managed accounts, with the two strategies raising £979 million from 11 institutional investors.
Macquarie estimates the annual pipeline of inflation-linked debt products to be worth around £4 billion, comprising up to £2 billion of lending to renewable projects and £500 million dedicated to offshore transmission assets as well as £1.5 billion in utilities’ network upgrades and refinancings.
Quercus is currently invested in 20 renewable energy projects worth some €350 million. It manages two renewable energy funds.