7 February 2013
Below is a copy of a Press Release we have sent out today confirming that Westmill Solar Cooperative's Senior Debt has been transferred from Investec Bank to Lancashire County Pension Fund (a Local Authority pension fund). This was as envisaged in the Offer Document of the Cooperative last year and we are very pleased to reach this milestone and welcome a long term relationship with Lancashire County Pension Fund.
Lancashire County Pension fund invests £12m in the world’s largest community owned solar power station
Lancashire County Pension Fund has invested £12m in a community-owned solar power station in Oxfordshire. The cooperative is believed to be the world’s largest community owned solar power station.
Built in 2011 on an organic farm and located next to the existing Westmill Windfarm Cooperative, the solar farm comprises 21,000 panels that can generate about 4.5 million kilowatt hours a year. Over a typical year the solar farm generates enough electricity to power 1,400 homes.
The community had the option to buy the project, and exercised this in October 2012 using interim finance from Investec Bank.
On 7th February the debt financing of the project cost was refinanced by a £12m bond from Lancashire County Pension Fund and arranged by Investec Bank - a leading bank with expertise of funding renewable projects and arranging bond finance.
County Councillor David Westley, Chair of Lancashire County Council Pension Fund said. “There’s been a
lot of discussion about local authority pension funds investing in community infrastructure. I’m pleased that Lancashire has been able to put this into practice with this £12m investment.
Our first responsibility is to secure the best returns for people in our pension fund, but I think many will be interested in knowing that their pension investments are helping fund worthwhile and sustainable schemes such as this one.”
Mark Luntley - Board Member of Westmill Solar Coop said. “My current job is helping councils develop a collective bond finance agency, in part because we think there's a potential for pension funds to invest in council and community infrastructure. This is an example of this in practice. We hope Lancashire pension members come and visit Westmill and that they will be inspired by how their investment is helping generate clean, green electricity”.
The index-linked bond is repaid over 23½ years. The bond provides the solar cooperative with long-term finance - whilst Lancashire secures a low risk investment that helps to match their index linked pension fund liabilities.
Ian Dixon of Investec Bank’ Project and Infrastructure Finance team said: “We’ve worked with Westmill
Coop team for almost a year helping to develop this arrangement. We’ve seen the Coop organise a successful share offer and we funded the project for the Coop to acquire the asset whilst the long term index linked bond funding was finalised. With long-term bank finance increasingly scarce we think bond investment is now more relevant for long-term infrastructure projects.”
“We are increasingly seeing interest in the renewables sector from a wide range of institutional investors. The asset class provides an excellent source of high quality, stable income, from an ethical source”, said JP Albin, Head of Alternatives Syndication at Investec
Founding Director of Westmill Solar Adam Twine said: “I think climate change is the most serious issue facing our generation. It is very exciting to have the public sector investing in a community developed and owned project at this sort of scale - and it’s what we need if we are to get genuine buy-in combined with the deployment of renewables at the speed we need to start making a difference.”
Westmill Chair Philip Wolfe said: “The cooperative is delighted that Lancashire County Council has taken this lead in pioneering investment in community renewables. The long-term income from community energy provides a great match to a pension fund’s commitments, and there is an obvious fit between local authorities and community projects. We believe this is a model that many others should follow in the future.”
Good Energy CEO and founder Juliet Davenport OBE said “We’re enormously excited to be buying power from the Westmill solar site, not only because it is clean, green and 100% renewable electricity, but also because of the pioneering and innovative way the project is set up. Community energy is the future, but Westmill is doing it today. We’re proud to be helping them do that.”