Lightsource BP

M&G’s infrastructure debt team completed a major debt refinancing for Lightsource in a deal that allocated nearly £250 million of funding for a large portfolio of operational solar projects in England

About Lightsource BP

Industry: Solar Energy
Headquarters: London, UK

Sun, Solar Panels and Green Field with Grazing Sheep

As people and governments across Europe work to generate more power from renewable sources, solar energy is becoming a crucial part of the mix.

We believe the rise of green energy has a vital role to play in reducing carbon emissions, helping to address a global environmental challenge.

We are therefore an active investor in providers of solar farms across the UK and Europe, lending long-term, stable finance to companies that are seeking to scale up solar energy generation. Our investment in Lightsource BP illustrates this in practice.The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.

Building economies of scale

Lightsource BP is a European market leader in the development, acquisition and long-term management of large-scale solar infrastructure projects.

To generate competitively-priced clean energy for businesses and consumers, the privately-owned company emphasises the importance of scale. It aims to expand into new countries and quadruple the solar generation capacity it manages to at least 8 GW by 2022.

Lightsource BP

  • #1 – largest solar company in Europe (by assets under management)
  • 2 GW – solar electricity generation capacity under management – enough to power a country like Luxembourg
  • £2.5 billion – invested in solar assets since launch in 2010
  • 25 years – typical length of asset management contracts
  • 20% - European Union target for the proportion of energy to be generated from renewable sources by 2020

Financing growth

The combination of rising demand for cleaner energy, in part to meet international targets for reducing emissions, and rapid advances in the efficiency of solar generation, create a structural opportunity for companies in the sector.

To embark on large-scale international solar projects, without having to sell the company’s existing revenue-generating assets, Lightsource BP sought an investment partner to refinance their debt.

Lending responsibly

In October 2015, M&G worked with Lightsource BP to put their customers’ money to work, lending the company nearly £250 million to pursue their aspirations.

Crucially, this private loan was secured against operational solar generation projects, mainly in the south and east of England. The portfolio of more than 30 solar plants can generate enough electricity to power over 30,000 homes.

M&G are committed to making investments that support socially responsible and sustainable economic growth. Before investing, we undertook rigorous analysis to satisfy ourselves that environmental risks, such as the solar plants’ impact on biodiversity, were being mitigated.

We also identified benefits for the local environment – sites can also be used for agricultural purposes like livestock grazing, for instance – and for local communities, as hosting solar panels offers landowners a rental income.

Delivering a sustainable income

We believe the secure and stable income stream that these solar assets generate, being linked to UK price inflation, could help M&G pension fund clients meet their long-term financial commitments. In turn, this should ultimately help pension savers fulfil their plans in retirement.

Not only this, but investing responsibly in solar power on this scale can be seen to make a meaningful positive contribution to the environment, both at a local and global level.

By enabling Lightsource BP to expand and deliver new solar projects, investments like ours play a role in boosting the role of renewable electricity generation, thereby helping to reduce carbon emissions over the long term.

 

The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested. The level of any income earned by the fund will fluctuate.

This information is not an offer or solicitation of an offer for the purchase of shares in any of M&G’s funds.Before subscribing you should read the Prospectus and the Key Investor Information Document. This financial promotion is issued by M&G International Investments S.A., Registered Office: 16, Boulevard Royal, L-2449, Luxembourg and M&G Securities Limited (registered in England, No. 90776), authorised and regulated by the Financial Conduct Authority in the UK. Registered office: Laurence Pountney Hill, London EC4R 0HH. The Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários, the “CMVM”) has received a passporting notification under Directive 2009/65/EC of the European Parliament and of the Council and the Commission Regulation (EU) 584/2010 enabling the fund to be distributed to the public in Portugal.’

 

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