PIC invests further £277 million in spanish solar bonds

12 June 2020

PIC publishes on its website:

“Pension Insurance Corporation plc (“PIC”), a specialist insurer of defined benefit pension funds, has provided £277 million (€304 million) of debt funding, as sole investor, for eight solar parks located in Spain, owned by FSL, one of Q-Energy’s three renewable energy investment vehicles. Q-Energy is a leading European investor and asset manager in the renewable energy sector.

This follows a debt investment of £190 million PIC made in February 2020, for 21 solar parks mainly located in Southern Spain, also owned by Q-Energy. PIC made its first renewable energy investment in 2012 and has made a total investment of almost £1 billion in the sector to date.

The investment is guaranteed by Assured Guaranty, resulting in an AA rating from S&P. The solar plants further benefit from the Spanish regulatory framework for the full term of the bond. The framework provides payments from the Spanish electricity system, which guarantees an agreed level of return and ensures predictable cashflows. Banco de Sabadell and Banco Santander acted as Bond Joint Lead Managers.

The solar parks have the capacity to provide enough energy to supply thousands of homes and have been in operation for almost 10 years. Key points of the transaction:

• The debt is fixed, amortising and matures in 2041, with a weighted average life of c.10 years
• Cashflows over the full term are well matched to PIC’s long-term liabilities, providing cashflows in years where it is difficult to source public bonds
• The investment extends PIC’s asset allocation to renewable energy
• The funds will be used to refinance existing debt

Q-Energy has over 15 years’ experience in renewable energy and has invested over EUR 4.5 billion globally in the sector. The contractor responsible for the operations, maintenance and asset management of the project is FSL Desarrollos Renovables, a wholly owned subsidiary of FSL.

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