A London Stock Exchange-listed investor in UK ground-based solar photovoltaic (PV) plants, Foresight Solar Fund, has announced its intention to pursue a secondary listing on the JSE through a private placement with institutional South African investors. The listing is expected to raise £50-million.

The closed-end investment company, which listed in London in 2013, owns a portfolio of 18 ground-based solar assets across Britain, with a gross asset value of more than £614-million and a total capacity of 470 MW.

The South African listing, the fund says, will enable qualifying South African investors to participate in the future income and capital performance of the fund. It also creates a new platform for Foresight Solar Fund to raise equity funding to pursue future growth and investment opportunities.

In February, Foresight Solar completed the acquisition of the Shotwick and Sandridge solar farms, in the UK, which have a combined capacity of 122 MW. However, it reports that it has identified a 250 MW pipeline of prospective assets arising from the continued consolidation in the UK market.

It says proceeds from the JSE private placement, as well as those arising from the issuance of new shares in the UK, will be used to refinance existing revolving debt facilities used for the acquisition of Shotwick and Sandridge and to invest in further UK ground-based solar PV assets.

The fund’s immediate pipeline only includes UK assets, but it is able to invest up to 25% of its gross asset value in other jurisdictions outside the UK and, therefore, does not rule out future South African investments.

“For the time being, however, we are focused on taking advantage of new acquisition opportunities in the UK market,” Foresight Group head of UK Solar Ricardo Piñeiro tells Engineering News Online. The Foresight Solar Fund is managed by the Foresight Group, which has £2.3-billion of assets under management across a number of funds.

In fact, Piñeiro says the success of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has created a “sophisticated understanding” of renewable energy and solar assets in South Africa.

The REIPPPP has attracted close to R200-billion-worth of investments in renewables, with a total of 2 291 MW of solar PV capacity procured over four bid windows.

“We looked at a number of other markets as part of the fundraising process and South Africa is unique in that investors have a very good understanding of the renewable-energy sector as a result of the success of the REIPPPP,” Piñeiro explains.

“We found strong demand from investors looking to invest in this asset class in the infrastructure sector, and in particular in renewable energy, as there are presently limited opportunities for this.”

Over the coming two to three weeks, Foresight Solar Fund will have an “extensive roadshow” to selected South African investors, with the aim of announcing the results of the private placing on March 29.

The fund expects to list on the ‘Financials – Equity Investment Instruments’ sector of the JSE’s Main Board on April 3.

“The prospective listing demonstrates global confidence in South Africa’s capital markets and will provide South African investors with an opportunity to access a unique asset class that traditionally has a low correlation with market returns,” Piñeiro states.

“It also provides a high-yield return for South African investors, which is paid in British pounds.”

Piñeiro stresses that the listing is not a public offer and private investors would need to consult their financial advisers regarding eligibility to participate. “The shares will be fully transferable between the UK and South Africa share registers after admission,” he concludes.