Bluefield Solar Income Fund has announced that is has entered into a conditional contract to acquire its ninth large-scale solar farm, a 19MW project located to the north of Swindon.
The site is being constructed by Wirsol Solar UK, recently acquired by Germany-based Conergy. Under the EPC contract, Wirsol Solar UK will warrantee the performance of the solar park as well as ongoing operation and maintenance.
The 19MW project is expected to be connected to the grid next month, in order to benefit from the 1.6 Renewable Obligation Certificate (ROC) support banding before it drops to 1.4ROCs in April 2014.
Bluefield notes that the Swindon solar farm represents a total investment consideration of around £21 million. However, the company only has around £14 milllion capital so is relying on a placing to raise the remaining £8 million. The company wants to go further though, and is targeting raising £13 million in total to help access additional investment opportunities in its pipeline.
Bluefield Solar Income Fund believes that the potential new acquisition leaves it well placed to deliver its target dividend of 4p per ordinary share in the first financial year (ending 30 June 2014), and 7p per ordinary share in the company’s second financial year, rising with RPI thereafter.
However, developers up and down the country are currently struggling to complete a number of solar sites due to the severity of recent floods. Bluefield believes that it is well insulated if there is a delay in grid connection due to agreements to step down the acquisition price if the March grid connection deadline is missed. Currently, seven out of the fund’s nine acquisitions are either operational or are expected to be grid connected by 31 March 2014.
The UK large-scale solar sector grew by 600% during 2013, driving the UK to a record 1.45GW of new solar PV capacity added.