Two subsidy-free solar projects are to be built with debt financing in an agreement between NextEnergy Capital Group (NEC) and Santander.
The bank, which already provides debt financing to the renewable energy sector, will provide a non-recourse debt financing structure of £100 million to cover the investment in the two projects.
One plant, at Llanwern in South Wales, will be the largest solar farm in the UK to date, at 75MW. The other plant is Strensham in Worcestershire, will be rated at 40 MW. Both plants are expected to connect to the grid in the final quarter of 2020 and bith will be contracted with power purchase agreements.
NEC has a long-term hold strategy for these projects and plans to move them to a new subsidy-free private fund, NextPower UK ESG, which will target a significant number of new-build subsidy-free solar projects focused exclusively on the UK.
Chief executive and founding partner Michael Bonte-Friedheim said: “It’s a pleasure to announce this innovative new financing structure and the commencement of construction on further critical energy generating assets to be delivered on a subsidy-free basis.
“…The ability for NEC to work with its partner Santander to implement this transaction considering the extremely challenging backdrop of COVID-19 lockdown shows the strength and depth of the teams involved, coupled with the resilience of solar as an asset class in these times.”