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Innovative direct financing from institutional investors into the solar sector with £31M investment from M&G Investments.

Primrose Solar has agreed a £31 million finance package with M&G Investments (“M&G”), a leading international investment manager, in order to refinance its Canworthy Water solar farm in Cornwall. The inflation-linked financing is repayable over 18.5 years and is provided by M&G’s clients seeking secure cash flows over the long term.

Canworthy was connected to the grid in December with a capacity of 41 MW, and is one the largest operational solar sites in the UK, generating enough electricity to supply the equivalent of 9,000 average homes.

This follows a £29 million deal concluded in October 2014 between M&G Investments and Primrose Solar to refinance four solar farms in Glamorgan, Norfolk and Dorset.

Novatio Capital trading as The Renewable Financing Company acted as the Arranger of both the finance packages that were put in place with M&G.

Giles Clark, CEO, Primrose Solar, says: “We are very pleased to have worked with M&G and Novatio Capital Limited to complete the refinancing of Canworthy, one of the largest operational solar farms in the UK. Securing long-term financing from a major institutional investor such as M&G is a strong endorsement of our business.

“Primrose now has 175 MW of solar projects either operating or under construction, making an important contribution to local and national renewable energy targets.”

Tim Huband, Head of Project & Infrastructure Finance, M&G Investments, says: “This landmark transaction injects long-term institutional financing into the emerging solar power sector. We have structured the deal to deliver inflation-linked returns, with good security to our pension fund clients.

“Given this is a relatively new sector seeking institutional investment it is essential for deals to be structured to protect client capital and ensure risks are appropriately rewarded. The investment characteristics on offer from this sector are attractive to our clients and we are keen to do more.”

Justin May, Executive Director, Novatio Capital, says: “We are delighted to have acted as the Arranger of this transaction, following up on the previous transaction we arranged for Primrose Solar in October last year. We have now arranged and executed £225 million of long term debt financing for solar assets in the UK and continue to seek further interesting investment opportunities.”