Rame, the independent power producer, has spoken to DirectorsTalk about the launch of its UK solar generating subsidiary which will initially own and operate up to four UK rooftop photovoltaic (“PV”) projects with a total potential capacity of 120kW.
To facilitate these projects, the Company has incorporated Rame Solar Limited a new, wholly owned subsidiary established as the holding company for the Company’s future UK solar power projects.
Rame Solar’s first special purpose vehicle (“SPV”), Rame Solar One Limited (“SPV 1”), a wholly owned subsidiary of Rame Solar, will own and operate up to four rooftop photovoltaic (“PV”) projects with a total capacity of 120kW. The first two Projects will provide power under a 20 year power purchase agreement (“PPA”) which has been entered into with an agricultural business for dairy related processes and one of Europe’s largest indoor motocross arenas.
The Projects qualify for feed-in tariff support under the UK Government ROO FIT scheme providing robust and attractive long term returns and are aligned with the Government’s strategy for the further deployment of PV in the UK. Construction of the first project has now commenced and the first three projects are expected to be operational by October 2015. It is estimated that the Projects will cost, in aggregate, approximately GBP180,000 to construct.
The Company has developed a substantial pipeline of rooftop and ground mounted PV projects in the UK over the past 12 months. Following the successful development of the Projects, the Company intends to roll out subsequent SPVs to finance, build and operate further PV assets in the UK. The structure of Rame Solar is specifically intended to provide a suitable corporate vehicle to support a variety of future financing options including bond issues that are increasingly common for UK PV investments.
For each project, Rame Solar will use Beco Ltd. (“Beco”) for the installation of the PV systems. Beco, which was acquired by Rame in 2014, is a long established UK solar installer with a strong track record of both rooftop and ground based solar projects. By using Beco, Rame Solar will retain the traditional solar installer’s margin within the group, thereby reducing capital expenditure and improving returns on the Projects.
Tim Adams, CEO, commented: “Through Beco’s activities in the UK PV market, we have been seeing increasing numbers of opportunities to create an internal portfolio of generating assets. These projects are both less time and capital intensive than our larger projects in Chile. Our in house installation capabilities allow us to control the project development from concept through to power generation whilst retaining the construction margin. Our planned project portfolio complements Beco’s core installation business and allows us to extend a PPA solution to our UK customers.
“Whilst we are launching with four initial projects, we believe there is scope to greatly add to this UK PV portfolio. We have consciously put in place a corporate structure which will allow Rame to efficiently manage these and future assets from both a financial and operational perspective.”
