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Virgin Money has completed a new deal supporting Scottish Hydro Investment Limited (SHIL) in the acquisition of two operational hydro schemes at Invergarry from Guinness Asset Management.
The £8m long-term loan provided by Virgin Money will support the acquisition, and upgrade, of the Glen Buck and Munergie hydro schemes.
Totalling 3MW and utilising storage capacity, it is anticipated the schemes will produce more than 10GWh of electricity per annum, following a period of upgrade works.
The deal is co-sponsored by existing bank client CRF Hydro Power Limited and the large corporate group Turner & Co (Glasgow) Ltd which, together, through the newly formed joint venture Foster Turner Hydro Limited, a company established to invest in low carbon renewable energy projects, are providing an undisclosed level of equity.
The amount of electricity set to be produced is said to be enough to power more than 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.
Keith Wilson, head of Renewable Energy at Virgin Money, said that 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.
‘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,’ added Mr Wilson.
Virgin Money has previously supported CRF Hydropower Limited. This involved a multi-million-pound package which assisted the growth of their hydro portfolio across Scotland.
Today CRF Hydropower Limited owns and operates 11 hydro schemes which have a combined capacity in excess of 7.7MW.
Together with Turner & Co (Glasgow) Ltd, they already jointly own one additional hydro scheme, which is currently under construction. This new deal will be both their second and third joint ventures together.
Mr Wilson continued: ‘This latest deal shows our ongoing commitment to supporting the renewables sector and is another significant step forward as part of our wider ESG strategy. We very much value our partnerships with existing customers, and always welcome new opportunities within the sector.’