Virgin Money has approved an £8m long-term loan to support Scottish Hydro Investment Limited (SHIL) in acquiring two operational hydro schemes from Guinness Asset Management.
The loan will be used towards the acquisition, and upgrade, of the Glen Buck and Munergie hydro schemes, located in the Scottish Highlands. Totalling 3MW and utilising storage capacity, it is anticipated the schemes will produce over 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 corporate group Turner & Co (Glasgow) Ltd who, 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.
Virgin Money said securing these new schemes through SHIL demonstrates the firm’s commitment to energy efficiency. The deal also 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.
“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,” commented 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 has previously supported CRF Hydropower Limited. This involved a multi-million-pound package which assisted the growth of its 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, it already jointly owns one additional hydro scheme, which is currently under construction. This new deal will be both their second and third joint ventures together, further supporting each company’s drive for carbon reduction.