The new BlackRock and Lightsource solar initiative will target both large and small portfolios on the UK secondary market as it opens its hefty cheque book.
Earlier this week the duo announced that they were to join forces under a new initiative dubbed ‘Kingfisher’, with the aim of investing £1 billion to acquire 1GW of UK solar capacity.
Speaking to Solar Power Portal, Lightsource CFO Paul McCartie revealed that the partnership did not expect to run into any problems in identifying assets to purchase despite the hotly competitive environment.
The UK’s secondary solar market has attracted a number of high profile institutional investors, tempted by predictable returns and the likelihood that subsidy-backed revenue streams will remain untouched. The likes of Octopus, Foresight, NextEnergy Capital, Bluefield, John Laing and others have all amassed UK solar portfolios in recent years.
It has previously been mentioned however that as larger portfolios have exchanged hands, the UK secondary market has been left fragmented. Vortex’s acquisition of the 365MW TerraForm portfolio attracted significant interest for that reason.
The abundance of 1.2 ROC sites on the market – capped at 4.99MW in size and connected up until 31 March 2017 – has also left the market appearing more fragmented than in the past.
But McCartie insisted that this would not be an obstacle to Kingfisher reaching its target.
“There are the big portfolios, and there’s a few of those that probably aren’t in final hands and we’re interested in those. [And] as a business we’ve done a lot of small projects as a developer, so we’re not shy from going after smaller portfolios or doing one, two, three-asset type portfolios and targeting those as well.
“I think we’re equally at home in large and small, and the way we’ve set up Kingfisher is that we can tackle both I guess,” he said.
A key factor in Kingfisher’s appeal to the market, McCartie said, would be its ability to use both levered and unlevered financing structures when it looks to purchase, something which he added would distinguish it from other players in the field.
Kingfisher will also take its time in taking assets on, with McCartie stating that there was no “desperate rush” to purchase assets.
Meanwhile Lightsource is not ruling out selling more of its own developed assets to Kingfisher, with the prolific developer engaged in various unsubsidised, private-wire assets.
“As we move forward, and I guess as we develop the relationship further, then we’ll no doubt have those same kinds of conversations around unsubsidised solar and looking at assets in different places,” he said.