Bluefield Solar Income Fund executes phase 2 of its strategic partnership

Bluefield Solar Income Fund (BSIF) has signed phase 2 of its strategic partnership with GLIL Infrastructure (GLIL), which is the agreement to sell a 50% stake in a 112MW portfolio of 1.4 and 1.3 ROC UK solar assets currently owned by Bluefield Solar. Proceeds from the sale will be used to repay a portion of the Company’s RCF, as well as to provide funding for construction of approximately 17MW of development assets as the initial commencement of Phase three of the Strategic Partnership.

The acquisition is in line with BSIF’s 31 March 2024 NAV of £817m and is conditional on Bluefield Solar and GLIL being approved buyers under the Planning Act 2008 for Nationally Significant Infrastructure Projects, due to Bluefield Solar’s interest in over 1GW of generating assets. Approval is expected in mid-August 2024.

BSIF’s board has reiterated its guidance in delivering its raised full year dividend of not less than 8.80p per share for the period ending 30 June 2024 (increased from 8.60p per share paid for the period ended 30 June 2023).

GLIL is a partnership of UK pension funds, investing into core UK infrastructure, including Local Pensions Partnership Investments, Greater Manchester Pension Fund, Merseyside Pension Fund, West Yorkshire Pension Fund and Nest, and has a £3bn portfolio of infrastructure assets.

The ‘Partnership Portfolio’

The Bluefield Solar portfolio of 112MW is diversified across southern and central England and comprises 9 operating sites all backed by Renewable Obligation Certificates (‘ROCs’); 78MW 1.4 ROC accreditation and 34MW 1.3 ROC accreditation.

Following amalgamation with the acquisition of the LightsourceBp Portfolio, in which Bluefield Solar acquired a 9% equity interest in tandem with GLIL under Phase One of the Strategic Partnership in December 2023, BSIF’s equity stake across the combined portfolios will increase to c.25%.

BSIF’s drawings on its RCF currently stands at £184m, with long term amortising debt being £423m. Overall, BSIF has total outstanding debt of £607m, with a leverage level of circa 43% (based on the March 2024 Net Asset Value).

Looking to phase 3

As announced on 22 December 2023, in phase 3, Bluefield Solar and GLIL intend, via the Strategic Partnership, to commit capital to a selection of BSIF’s development pipeline, assuming market conditions are supportive. The identified c17MWp of Auction Round 4 Contracts for Difference (CFD) development assets are expected to be grid connected within the next twelve months.

Comments from John Scott, chairman of BSIF

“We are delighted to announce a landmark transaction for the sector in the completion of the second phase of the Company’s strategic partnership with GLIL, providing a significant source of capital for BSIF while validating the Company’s Net Asset Value through this endorsement from an institutional investor of the highest calibre. The cash proceeds of c£70 million will be used prudently to reduce the Company’s leverage while also enabling the Company to commit further capital to BSIF’s significant proprietary development pipeline. The new projects in development provide an exciting opportunity for significant value accretion for shareholders while also expanding the UK’s solar resources to help achieve our national climate goals.”

Comments from Julia Carter, Deputy Portfolio Manager at GLIL Infrastructure

“This acquisition represents the continuation of our strong strategic relationship with the team at Bluefield Solar, as well as our commitment on behalf of our members to helping drive the energy transition. Not only do these assets make a welcome addition to our growing green energy portfolio, but they maintain our strong track record of backing core UK infrastructure projects. Along with our members and Bluefield Solar, we recognise our role as custodians of the future. We have a responsibility to ensure our investments help decarbonise industries, but also support local communities through regeneration projects and job creation and help drive the economy forwards.”