Eaga secures £300m solar project funding

Eaga announced today that it has secured funding from a group of banks for its £300m “solar project”. Securing the funding means the firm can now install PV systems in over 30,000 homes.

Under the terms of the deal, Eaga will invest £15m in the equity portion of a special purpose vehicle, while HSBC Environmental Infrastructure Fund and Barclays European Infrastructure Fund II will each invest £30m.

Debt financing of £225m will be provided by a syndicate of five banks comprising HSBC, Lloyds, National Australia Bank Limited, RBS and Santander. The financing will be drawn down as the PV systems are installed.

Carillion, which has made a recommended offer for Eaga, is said to be “highly supportive” of the solar project and has supported and endorsed its signing.

Eaga chief executive, Drew Johnson said: “I am delighted that we have completed the finance raising of this ground breaking project, which has been made possible by the support of all of our financing partners.

“The pathfinder nature of the project has meant that it has taken longer than we expected to get to this stage, during which time we have had to carry significant costs to maintain our installation capability, but we are now uniquely positioned with both the financial resources and the operational capability to capitalise on this significant market opportunity”.

Eaga will install the PV systems and also provide aftercare services for the SPV.

It is expected that this solar project will open the way for similar projects. Up to today’s announcement, Eaga has installed more than 1,000 solar PV systems and it is intended that these will be transferred to the SPV over time.

Eaga received advice from J.P. Morgan Cazenove, Noble Grossart, Brewin Dolphin Corporate Advisory and Broking and DLA Piper in finalising the transaction.