Get your InfraPPP & IPP Journal subscriptions: 25% discount from 10 to 27 September 2019 with the code INFRAIPP25
GCP Infrastructure Investments, the UK listed infrastructure fund focused primarily on investments in UK infrastructure debt, confirmed last week that the company has subscribed two loans for a biomass project and an onshore wind project.
On December 12th, GCP Infrastructure Investments subscribed through the GCP Infrastructure Fund Limited for loan notes with a term of around 19 years and an aggregate value of £6.46 million. The yield on the notes will be about 9.8% per annum.
The notes have been issued by GCP Onshore Wind 2 Limited, a single purpose company, and the proceeds from the issue of the notes are being used to make loans secured on a senior-ranking basis against three 500kW single turbine wind sites being developed in Scotland and Wales.
All payments of both principal and interest in relation to the notes are expected to be serviced from income arising from the generation of electricity by the wind sites in the form of receipts under the feed-in tariff and from the sale of the electricity under a power purchase agreement.
On December 13th, GCP Infrastructure Investments subscribed through the GCP Infrastructure Fund Limited for a loan note with a term of around 17 years and an aggregate value of £14.5 million. The yield on the loan note will be 9.1% per annum, payable quarterly in arrears.
The loan note will be issued by GCP Biomass 2 Limited and the proceeds used to provide a loan secured on a senior basis to part-finance the construction of a 10.3 MWe recovered wood-fuelled power plant on a two acre site in Tyseley, Birmingham.
The plant is forecast to supply enough renewable energy to power 17,000 homes a year over its expected 20 year lifetime.
The loan from GCP Biomass 2 Ltd will be invested on a matched basis with a loan from the UK Green Investment Bank. The equity investment will be made by a consortium of Balfour Beatty Investments, Eternity Capital Management, Foresight Group managed funds and O-Gen.
Following the commissioning of the plant, all payments of both principal and interest in relation to the loan note are expected to be serviced from income arising from the Renewables Obligation Certificates - that are issued by Ofgem - generated by the operation of the plant.