A special purpose vehicle company (SPV) has been set up for the project, with £15m equity invested by Eaga itself and £30m each by HSBC Environmental Infrastructure Fund and Barclays European Infrastructure Fund II. Debt financing of £225m will be provided by a syndicate of five banks comprising HSBC, Lloyds, National Australia Bank, RBS and Santander. The financing will be drawn down as the PV systems are installed.
Carillion, which is paying £306.5m for Eaga, has endorsed the Solar Project.
Eaga will install the PV systems and also provide aftercare services on behalf of the SPV. It is expected that this Solar Project will install PV systems in more than 30,000 homes and it opens the way for similar projects, given the scale of UK government's targets for the installation of domestic renewable energy systems. Eaga has already installed more than 1,000 solar PV systems, and it is intended that these will be transferred to the SPV in due course.
Eaga chief executive Drew Johnson said, "I am delighted that we have completed the finance raising of this ground breaking project which has been made possible by the support of all of our financing partners. The pathfinder nature of the project has meant that it has taken longer than we expected to get to this stage, during which time we have had to carry significant costs to maintain our installation capability, but we are now uniquely positioned with both the financial resources and the operational capability to capitalise on this significant market opportunity".
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