Foresight Solar sells 50% stake in Spanish portfolio to EB-Sustainable Investment Management
Foresight Solar, a fund committed to sustainable investments in solar and battery storage assets, has sold a 50% stake in its Lorca portfolio in Spain. EB-Sustainable Investment Management (EB-SIM), a subsidiary of Evangelische Bank, acquired the stake for €26.9 million, a 21% premium over the third quarter holding value. This transaction represents an exit internal rate of return (IRR) of 12.1% for Foresight Solar.
Use of Proceeds and Future Plans
The proceeds from this deal will be fully utilized to pay down Foresight Solar’s variable rate revolving credit facility, thereby lowering its gearing and reducing interest expenses. The Investment Manager is also progressing in discussions to finalize the divestment of approximately 200MW of operational assets, a process set to continue into 2024.
About the Lorca Portfolio
Lorca, a 99MW subsidy-free solar portfolio in Spain, includes three assets: Las Salinas (30MW), Los Llanos (49MW), and Los Picos (20MW). Acquired by Foresight Solar three years ago at the ready-to-build stage, these projects became operational in 2022, resulting in a 2 pence per share Net Asset Value (NAV) uplift.
Foresight Solar divests 50% stake in Spanish portfolio to EB-Sustainable Investment Management
Long-Term Revenue Visibility
The Lorca portfolio benefits from a 10-year fixed price power purchase agreement (PPA) with Statkraft, contributing to long-term revenue visibility for about 70% of the assets’ annual production. The sites produced 138GWh of electricity in the nine months leading up to September 2023.
Leadership Comments
Alexander Ohlsson, Chair of Foresight Solar, emphasized the strategic nature of this divestment: “After a comprehensive analysis of our portfolio, we concluded these assets were the ideal option to start our divestment process… We are now selling a stake at a premium to crystallise value and recycle capital into other options.”
Dr. Bernhard Graeber, Managing Director at EB-SIM, highlighted Spain’s solar potential and the appeal of the Lorca portfolio: “Spain enjoys some of the highest irradiation levels in Europe… The revenue visibility from the PPA makes it even more appealing.”
This deal between Foresight Solar and EB-SIM reflects the growing trend of sustainable investments in the renewable energy sector, particularly in solar energy.