Virgin Money has completed a deal supporting Scottish Hydro Investment Limited (SHIL) in the acquisition of two operational small hydro schemes from Guinness Asset Management.
The £8 million (US$11.1 million) long-term loan provided by Virgin Money will support the acquisition, and upgrade, of the Glen Buck and Munergie hydro schemes, located in the Scottish Highlands. The schemes have a total capacity of 3 MW and are expected to produce over 10GWh of electricity annually, after a period of upgrade work.
The deal is co-sponsored by existing bank client CRF Hydro Power Limited and corporate group Turner & Co (Glasgow) Ltd. Together these two, through the newly formed joint venture Foster Turner Hydro Limited, are providing an undisclosed level of equity.
Securing these new schemes through SHIL demonstrates the firm’s commitment to energy efficiency, as the amount of electricity produced will be enough to power over 2,600 homes and displace c.2,500 tonnes of carbon per annum. The deal further develops Virgin Money’s existing portfolio of sustainable lending and represents another step in its pledge to halve the carbon impact of its loan book by 2030, according to a press release.
“While sometimes overlooked, medium-scale hydro schemes have an important role to play in supporting the energy transition, particularly those capable of delivering power at times of peak demand, as is the case here,” said Keith Wilson, head of renewable energy at Virgin Money. “Our track record of supporting the hydro sector is already second to none and we are pleased to have concluded another two high performing schemes.”
Virgin Money previously supported CRF Hydro Power Limited with a multi-million-pound package that assisted the growth of its hydro portfolio across Scotland. CRF Hydro Power Limited owns and operates 11 hydro schemes with a combined capacity in excess of 7.7 MW. Together with Turner & Co (Glasgow) Ltd, they already jointly own one hydro scheme under construction. This new deal will be both their second and third JVs together.
Virgin Money says it continually strives to fulfil its strategic growth ambitions, including sustainable lending and green products, as well as addressing residual carbon.