Pension Insurance Corporation (PIC) has confirmed that it invested £120m in Spanish solar bonds in December, which will fund the construction of 12 solar parks.

The funds will be used to refinance existing debt, with PIC stating that the debt funding is well-matched to its long-term liabilities and would provide cash flows in years where it would be difficult to source public bonds.

The debt is fixed, amortising and is set to mature in 2038, with a weighted average life of approximately nine years.

The solar plants benefit from the Spanish regulatory framework for the full term of the bond, as this provides payments from the Spanish electricity system that guarantee an agreed level of return and ensure predictable cashflows.

The insurer of defined benefit pension funds invested £587m in solar energy in 2020, covering 42 solar plants owned by Q-Energy, and has now invested over £1bn in renewable energy since its first investment in the sector in 2012.

In June, the company invested £277m in eight solar parks in Spain.

Q-Energy investment team, Manuel Espinosa, commented: “We are pleased to have completed our third round of debt funding with PIC in Spanish photovoltaic plants. PIC’s latest investment in solar energy demonstrates the strength of the sector and their confidence in its long-term outlook.

“PIC has yet again demonstrated flexibility and expertise in constructing deals with renewable energy assets.”

PIC senior debt origination manager, Florence Carasse, said: “We are delighted to have worked again with Q-Energy, an experienced and respected investor and asset manager within the renewable energy sector.

“This transaction meets our long-term requirements and will help to pay the pensions of our policyholders, whilst delivering much needed funding into infrastructure projects that are tackling climate change.”

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