Milestone £31m refinancing deal for community solar partnership

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CORE - a consortium of community solar farms - has secured £31m refinancing. This landmark investment pioneers institutional financing into the community renewable energy sector.
18 Mar, 2022

Community Owned Renewable Energy Partners (CORE) – a consortium of community solar farms – has secured a £31m inflation linked debt refinancing from abrdn, one of the world’s largest institutional investors with over £532 billion in assets under management. This landmark investment pioneers institutional financing into the community renewable energy sector.

CORE is a £50 million social investment partnership between charitable trust Power to Change and Big Society Capital. Launched in 2017 and structured by Finance Earth, its aim is to bring solar farms into community ownership and deliver lasting environmental, social and financial benefits for the local community where the assets are based. CORE solar farms have supported their local communities with over £300k of community benefit funding since 2018, including Kent Community Energy, who have gave a grant to Emmaus, a charity that provides meaningful employment and housing to formerly homeless people.

The solar farms are based across England and Wales, and the refinancing paves the way for CORE and Finance Earth to structure further financing offerings later this year to enable community-ownership and lasting local benefits of the solar farms. Power to Change’s aligned Next Generation grant programme has provided over £1 million of grant and services funding to support the development of local community businesses linked to the solar farms.

As the latest IPCC report hammers home the devastating impacts of climate breakdown, this milestone announcement offers a model for community energy as a cornerstone of a clean energy future, and proves CORE’s founding thesis that aligned institutional investors can help scale the sector. The funding supports the renewable energy portfolio’s contribution towards net-zero carbon emission targets and is an important step in Power to Change’s commitment to support a fairer, greener economy.

The financing will deliver a long-term, non-recourse, reliable, RPI-linked and fully amortising debt structure running for a 15-year tenor until 2036. The financing was arranged by Finance Earth and investment to support the refinancing came from Phoenix Group, a longstanding funding partner to abrdn and the two parties work closely on environmental, social and governance (ESG) principle-based investment strategies.

Will Walker, Climate Manager of Power to Change, commented: “This mission-aligned institutional investment covering 22% of the community solar PV sector is a significant development in community energy finance. With well over £1m already distributed to local communities in surplus profits from the CORE solar farms and grants from Power to Change, it is also delivering significant community benefits from helping to address urgent local issues on the ground such as homelessness and fuel poverty, and developing new community business-led solutions to net zero. Power to Change is committed to working with our partners to secure the long-term legacy of this deal for the local communities involved and wider sector.”

Peter Jenkins, Chair of CORE, commented: “Over the past four years, CORE has worked with the community energy sector to build a portfolio capable of attracting mission-aligned institutional financing, to match COREs community investment strategy and future ambitions. This refinancing with abrdn and Phoenix demonstrates that community energy schemes can be financed at scale, in partnership with like-minded institutions, and as a result generate significant financial benefits for local communities.”

 Philip Coventry, Acting Co-Chief Executive of Community Energy England, commented: “The CORE refinancing is a milestone for community energy, demonstrating institutional and ESG investment in the sector at scale. CEE is calling on the Government, investors and funders to work together to unlock opportunities like these to grow the community energy sector, increase our energy security and harness the clear support for and benefits of a community energy revolution across the country.”

 Alex Campbell, Investment Director, Infrastructure Debt of abrdn, commented: “We are pleased to have been able to work with Finance Earth to structure and execute a transaction that supports CORE’s unique community offering. The investment was made on behalf of one of our strategic clients, Phoenix Group, which will support them with secured, long-term, inflation-linked cash flows they need to support their future liability obligations. The measurable social impact of the CORE portfolio is central to our investment thesis.”

Rich Speak, Co-Founder and Managing Director of Finance Earth, commented: “We are very pleased to have worked with abrdn to complete the refinancing of the CORE portfolio. We believe the facility has been secured at an attractive rate and optimises the capital structure of the Fund and its underlying projects abilities to generate surplus community profits”

CORE’s 40MW portfolio consists of Renewables Obligation Certificates (ROC) and Feed-In Tariffs (FiTs) accredited assets geographically distributed across England and Wales and it comprises 22% of the community owned Solar PV in England and Wales.

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Notes to Editors

About CORE
Community Owned Renewable Energy LLP (CORE) is a £50 million investment partnership between Power to Change and Big Society Capital. CORE’s portfolio of nine solar farms across England and Waleshave a total enterprise value of over £50 million and generating capacity of c. 40MW, capable of providing the annual domestic electricity consumption for 13,500 homes. The solar farms are being optimised to enhance their performance, reduce operating costs and maximise community benefit. CORE will then transfer all the projects into full community ownership over the next few years.

 About Power to Change
Power to Change is the independent trust that supports community businesses in England.

Community businesses are locally rooted, community-led, trade for community benefit and make life better for local people. The sector owns assets worth £870m and comprises 11,300 community businesses across England who employ more than 37,000 people. (Source: Community Business Market 2020).

From pubs to libraries; shops to bakeries; swimming pools to solar farms; community businesses are creating great products and services, providing employment and training and transforming lives. Power to Change received an original endowment from the National Lottery Community Fund in 2015 and a further £20million grant in 2021.  @peoplesbiz

About The National Lottery Community Fund
We are the largest community funder in the UK – we’re proud to award money raised by National Lottery players to communities across England, Scotland, Wales and Northern Ireland. Since June 2004, we have made over 200,000 grants and awarded over £9 billion to projects that have benefited millions of people.

We are passionate about funding great ideas that matter to communities and make a difference to people’s lives. At the heart of everything we do is the belief that when people are in the lead, communities thrive. Thanks to the support of National Lottery players, our funding is open to everyone. We’re privileged to be able to work with the smallest of local groups right up to UK-wide charities, enabling people and communities to bring their ambitions to life.

About Big Society Capital
Big Society Capital is the UK’s leading social impact investor. We unite capital, expertise and ideas to improve people’s lives.

Working with expert partners, we seek to understand people’s needs first. Then, using our knowledge and capital, we collaborate and invest with fund managers who also want to create a better, sustainable future. They, and the social enterprises and charities they invest in, create the impact. Our role is to bring the most relevant experts from our network to the table, generating ideas and connecting capital to where it’s most needed. With the others who have invested alongside us, we have made nearly £2 billion of new capital available to help improve lives.

We want to give more people and communities the chance to have an impact on the issues they care about – from affordable homes to vulnerable older people and preventing mental ill health.

In this way, we create opportunities for investors and enterprises to generate systemic social change, not just today but for generations to come. @BigSocietyCap