PIC invests additional £120 million in Spanish solar bonds

London, 2 February 2021 – Pension Insurance Corporation plc (“PIC”), a specialist insurer of defined benefit pension funds, has provided £120 million (€132 million) of debt funding, as sole investor, for a further 12 solar parks. PIC invested £587 million in solar energy in 2020, covering 42 solar plants. The solar parks are owned by Q-Energy. Q-Energy is a leading European investor and asset manager in the renewable energy sector.

This investment, made in December 2020, follows previous debt investments of £190 million in February 2020, and £277 million, in June 2020, funding 29 solar parks, also owned by Q-Energy, all located in Spain. PIC made its first renewable energy investment in 2012 and has made a total investment of over £1 billion in the sector to date.

The solar plants, which have been in operation for 12 years, 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 S.A. acted as Bond Manager.

Key points of the transaction:

• The debt is fixed, amortising and matures in 2038, with a weighted average life of c.9 years
• The investment is 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

Manuel Espinosa, from Q-Energy’s investment team, said: “We are pleased to have completed our third round of debt funding with PIC in Spanish photovoltaic plants. PIC’s latest investment in solar energy demonstrates the strength of the sector and their confidence in its long-term outlook. PIC has yet again demonstrated flexibility and expertise in constructing deals with renewable energy assets.”

Florence Carasse, Senior Debt Origination Manager at PIC, said: “PIC is a committed investor in renewable energy with total investments of more than £1 billion in the sector, as a socially beneficial outcome of our purpose. We are delighted to have worked again with Q-Energy, an experienced and respected investor and asset manager within the renewable energy sector. This transaction meets our long-term requirements and will help pay the pensions of our policyholders, whilst delivering much needed funding into infrastructure projects that are tackling climate change.”

- ends -

Notes to Editors:

For further information please contact:

Jeremy Apfel                         
+44 (0)20 7105 2140                                                   
apfel@pensioncorporation.com