LONDON (Alliance News) - Bluefield Solar Income Fund Ltd Wednesday said it is to acquire its tenth large-scale solar plant in the UK in a GBP19.0 million deal that includes transaction costs, debt costs and working capital, marking the first time it has dipped into the GBP50.0 million revolving credit facility it agreed with Royal Bank of Scotland Group PLC last week.
Additionally, Bluefield Solar Income Fund said that it expects to deliver against its target dividend of 4 pence per share for the year ended June 30, and 7 pence a share for its second financial year, after which it intends to increase its dividend in line with the UK retail price index measure of inflation.
In a statement, the fund, which invests in large-scale agricultural and industrial solar assets, said that it is to acquire the 17.5 megawatts peak plant in Hertfordshire. It expects the acquisition to qualify under the UK government's 1.4 renewable obligation certificate regime. The UK government's renewables obligation, which was introduced in 2002, requires licensed UK electricity suppliers to source a specified proportion of the electricity they provide to customers from eligible renewable sources.
Solarcentury, a solar supplier with offices in the UK, Italy and The Netherlands, will build the plant and will then warrant its performance for an initial period. Under a separate agreement, it will also operate and maintain the plant.
Since its initial public offering in July 2013, Bluefield Solar Income Fund has used the GBP130.0 million it received from investors to invest in nine solar plants, though its ninth required a GBP13.0 million placement. Its latest debt-funded acquisition was made possible by the three-year facility provided by RBS, which was secured against its existing assets at a 225 basis point margin over Libor. The maximum ratio of loan to net assets was set at 35%.