Solar developer Lightsource has teamed up with asset manager BlackRock in a strategic partnership aimed at consolidating the secondary UK solar market through around £1bn of acquisitions over the next three years.
The two companies yesterday revealed plans to acquire around 1GW of installed and operational UK solar power assets through a newly-created partnership named Kingfisher, which will target both levered and unlevered asset opportunities.
Lightsource said it had already kicked-started the partnership with a portfolio of 25 newly-constructed solar assets that boast either Renewables Obligation Certificate (ROC) or Contract for Difference (CfD) support with a total installed capacity of 156MW. It also plans to add a further 50MW of Northern Ireland ROC assets to the partnership later this year once they become operational.
As part of the agreement, Lightsource said it would be providing long-term operations and asset management services for the Kingfisher partnership, building on its experience providing such services for 1.9GW of utility-scale UK solar assets.
Lightsource chief investment officer, Paul McCartie, said the Kingfisher partnership was furether evidence of the firm’s ability to create profitable and sustainable investment opportunities in the solar energy market.
“By leveraging economies of scale, Lightsource can provide cost efficiencies and better returns as we acquire UK solar plants and operate them as part of our growing global portfolio,” McCartie said in a statement. “This is the clear differentiator between Lightsource and many other solar companies.”
One of the world’s largest asset managers, BlackRock manages around $4.8bn of equity assets in the renewable power sector through its dedicated Real Assets platform. Last week it also revealed it had raised a further £475m for its Renewable Income UK fund, thereby securing its position as the largest renewables investment fund in the UK.
Rory O’Connor, MD and head of renewable power for Europe at BlackRock, welcomed the partnership as a chance to create a new UK solar portfolio.
“Over the last two years, we have invested in more than 20 solar projects in the UK representing nearly 150MW of capacity on behalf of our clients, and we believe this market continues to present attractive opportunities for institutional investors,” he said. “In working closely together with Lightsource as a leading developer and operator of solar projects we are confident to realise a lot of additional potential in the market.”