Virgin Money has completed a deal supporting Scottish Hydro Investment (SHIL) in the acquisition of two operational hydro schemes in the Highlands from Guinness Asset Management.
The £8million long-term loan provided by the bank will support the purchase and upgrading of the Glen Buck and Munergie storage schemes, at Invergarry.
Following upgrade works, it is anticipated they will produce more than 10 gigawatt-hours (GWh) of electricity every year.
The deal is co-sponsored by existing Virgin Money client, Lochgilphead-based CRF Hydro Power and large corporate group Turner & Co, of Glasgow.
New renewables joint-venture
The two firms have formed a joint-venture, Foster Turner Hydro, to invest in low carbon renewable energy projects.
Virgin Money said the deal further extended its portfolio of sustainable lending and represented another step in its pledge to halve the carbon impact of its loan book by 2030.
The bank has previously supported CRF Hydro Power with a multi-million-pound package to assist with the growth of its portfolio across Scotland.
The firm currently owns and operates 11 hydro schemes with a combined capacity of more than 7.7 megawatts (MW), including ones at Achnamara in Argyll, and another near Loch Maree, in Wester Ross.
With Turner & Co it jointly owns another scheme, which is currently under construction.
Keith Wilson, head of renewable energy at Virgin Money, said: “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.”
“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.”
Roy Foster, of CRF Hydro Power, added: “With more than 35 years’ experience in the sector ourselves, my team and I are continually impressed by Virgin Money’s specialist understandings of renewables.
“They have supported us to complete deals quickly and efficiently – putting our plans into action and really getting the ball rolling on these exciting projects.”
This story was amended on June 22, 2021 to make clear it referred to “storage” rather than “pumped storage” schemes