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Atrato Onsite Energy inks GBP77.3 million rooftop solar portfolio deal

13th Sep 2023 12:20

(Alliance News) - Atrato Onsite Energy PLC on Wednesday said it entered into a share purchase agreement to acquire a fully operational portfolio of rooftop solar assets from a fund managed by Federated Hermes Infrastructure.

The London-based renewable energy investment trust said the portfolio has a total value of GBP77.3 million, while any transaction would have a financial effective date of December 31 last year, meaning Atrato Onsite Energy would benefit from the operational cashflows generated during the year to date.

Atrato Onsite Energy expects completion of the transaction to take around six weeks.

The portfolio comprises 34 megawatts of solar photovoltaic systems situated on residential rooftops across the UK, Atrato Onsite Energy said, benefitting from payments via the UK government's feed-in-tariff scheme from respective utility companies.

The company and its investment adviser believe the portfolio represents a "highly accretive addition" to the company's portfolio of solar assets. This is because of its "its attractive return profile, with revenue streams underpinned by government backed income and 100% uncapped [retail price index] inflation linkage".

Atrato Onsite Energy expects the portfolio set to be acquired to generate 30 gigawatt hours of clean energy annually, providing 5,800 tonnes of carbon dioxide emissions savings per year. This is equivalent to powering 10,000 UK homes or planting 230,000 trees, it said.

Atrato Onsite Energy said the FIT contracts have a 12-year weighted average unexpired term and benefit from annual uncapped RPI uplifts, with minimal exposure to wholesale power prices.

The transaction includes GBP38.7 million of existing fixed rate project finance debt, Atrato Onsite Energy said, while the cost of debt is 2% and the existing project finance within the structure amortises over the remaining 12-year FIT period.

"We are delighted to have had the opportunity to acquire this significant rooftop portfolio which has strong fundamentals and fits well into our current portfolio," said Gurpreet Gujral, managing director at Atrato Partners and investment adviser to Atrato Onsite Energy.

"The acquisition will provide immediate, long-term, highly contracted cash flows with 100% uncapped RPI linkage and UK government backing."

Shares in Atrato Onsite Energy were down 1.5% to 66.96 pence each in London on Wednesday after midday.

Earlier this month, Atrato Onsite Energy signed a new GBP30.0 million revolving credit facility with NatWest Group PLC, which it said has an initial three-year term and a one-year extension option at a margin of 1.30% over sterling overnight index average.

The facility also includes a GBP20.0 million uncommitted accordion option which is exercisable at any time over the initial term, Atrato Onsite Energy said at the time.

By Greg Rosenvinge, Alliance News reporter

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