PIC invests further £277 million in Spanish solar bonds

London, 11 June 2020 – Pension Insurance Corporation plc (“PIC”), a specialist insurer of defined benefit pension funds, has provided £277 million (€304 million) of debt funding, as sole investor, for eight solar parks located in Spain, owned by FSL, one of Q-Energy’s three renewable energy investment vehicles. Q-Energy is a leading European investor and asset manager in the renewable energy sector. 

This follows a debt investment of £190 million PIC made in February 2020, for 21 solar parks mainly located in Southern Spain, also owned by Q-Energy. PIC made its first renewable energy investment in 2012 and has made a total investment of almost £1 billion in the sector to date.

The investment is guaranteed by Assured Guaranty, resulting in an AA rating from S&P. The solar plants further benefit from the Spanish regulatory framework for the full term of the bond. The framework provides payments from the Spanish electricity system, which guarantees an agreed level of return and ensures predictable cashflows. Banco de Sabadell and Banco Santander acted as Bond Joint Lead Managers.

 The solar parks have the capacity to provide enough energy to supply thousands of homes and have been in operation for almost 10 years.

 Key points of the transaction:

• The debt is fixed, amortising and matures in 2041, with a weighted average life of c.10 years
• Cashflows over the full term are well matched to PIC’s long-term liabilities, providing cashflows in years where it is difficult to source public bonds
• The investment extends PIC’s asset allocation to renewable energy  
• The funds will be used to refinance existing debt

Q-Energy has over 15 years’ experience in renewable energy and has invested over EUR 4.5 billion globally in the sector. The contractor responsible for the operations, maintenance and asset management of the project is FSL Desarrollos Renovables, a wholly owned subsidiary of FSL.

Manuel Espinosa, from Q-Energy’s investment team, said: “We are once again delighted to be able to work with PIC to arrange this debt funding. This is another significant investment in renewable energy by PIC and it signals their confidence in us and in the strength of the underlying asset. We continue to be impressed by PIC’s flexibility and thorough understanding of the market.”

Florence Carasse, Senior Debt Origination Manager at PIC, said: “Following this transaction, PIC will have invested almost £1 billion in renewable energy projects, including about £467 million in Spanish solar energy plants. This is a secure transaction in a resilient and sustainable sector that will provide the cashflows to pay the pensions of our policyholders for decades into the future, as well as helping to reduce global carbon emissions.

“We are delighted to once again have worked with the teams at Q-Energy and Assured Guaranty and look forward to working with them on future projects.”

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Notes to Editors:

For further information please contact:

Pension Insurance Corporation     
Jeremy Apfel                         
+44 (0)20 7105 2140

apfel@pensioncorporation.com

About Pension Insurance Corporation
The purpose of PIC is to pay the pensions of its current and future policyholders. PIC provides secure and stable retirement incomes through leading customer service, comprehensive risk management and excellence in asset and liability management. At 31 December 2019, PIC had insured 225,100 pension scheme members and had £40.9 billion in financial investments, accumulated through the provision of tailored pension insurance buyouts and buy-ins to the trustees and sponsors of U.K. defined benefit pension schemes. Clients include FTSE 100 companies, multinationals and the public sector. PIC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority (FRN 454345). For further information please visit www.pensioncorporation.com

About FSL

FSL owns and operates 125MWp of solar photovoltaic plants in Spain and Italy.

Since its foundation in 2006, FSL has invested over €1.5bn in renewable energy assets worldwide. These assets produce 246,500 Mwh/yr. of the cleanest energy, supplying 70,400 households and avoiding 75,400 tons of CO2 every year.

About Q-Energy

Q-Energy is proud to have more than 120 employees based in Madrid and Berlin offices, and to have invested over €4.5bn in global renewable energy assets since its inception, including having raised more than €3.5bn of debt, either in bank debt or project bonds, and often pioneering the market with new structures. Our in-house Asset Management team of over 70 people currently manage over 1GW of European renewable assets, including the second largest Solar PV asset in Europe (Project Mula, 494 MWp, in Mucia Spain). These assets provide clean electricity to over 140,000 households and avoid carbon emissions of over 500,000 tCO2 per year.