Foresight Solar Fund Limited announced it has secured a pipeline of development-stage solar farms with a total potential capacity of 467MWp. The entire project rights have been secured from Grupo Cuerva, a renewable energy company and distribution network operator, and another Spanish developer. This strategic investment - codenamed "Project Lynx" - is located across the south and east of Spain and consists of the rights to six subsidy-free solar development projects. Two of the sites have sought grid connections under the existing application routes and one of those, totalling 57MWp, has already secured grid access with the potential to reach ready-to-build status in 2024. The remaining projects will apply for connections via the upcoming capacity market auctions, which are estimated to take place over the next few years. Foresight Group's knowledge of the Spanish market and its presence in the country were instrumental in establishing the bilateral discussions that led to this transaction. The Investment Manager's team in Madrid will oversee the projects' evolution alongside the experienced developers responsible for establishing them, who will continue the development under a services agreement. Development-stage projects are those that have secured land rights and have a delivery plan but still require additional work to guarantee the necessary permits to start construction. Under the structuring of this transaction, a modest down payment has been made to the vendors at closing, with Foresight Solar retaining preferential rights to increase the portfolio over time.
Full consideration for the assets is contingent onmilestone achievements tied to the projects securing grid connections and reaching ready-to-build status over the next few years.Payments for the development rights are also cross-collateralised, such that the initial outlay for any asset that fails to progress may be offset from future milestone payments for successful ones. This helps to protect the Company's risk adjusted returns regardless of the total number of projects that are eventually successful in achieving planning consent.