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Virgin Money has agreed a new financing partnership with specialist alternative asset management company Gresham House, it is the bank’s largest transaction in the renewable sector to date. This relationship will provide Gresham House Solar Distribution LLP (GHSD) with an £18m revolving credit facility, through a flexible funding arrangement, to facilitate the growth of its solar assets.

In line with Virgin Money’s strategy to at least halve the carbon emissions across everything the bank finances by 2030, this is the bank’s first major step towards possessing a loan book comprised of at least 5% in sustainable lending by FY22.

The Gresham House alternative investment fund has successfully raised more than £49m from investors to date and currently owns eight operational ground-mounted solar parks in England and Wales. With a total capacity of 48MW, the portfolio generates more than 45GWh of electricity per year – enough to supply more than 12,500 homes and save more than 20,000 tonnes of carbon dioxide emissions annually.

The Virgin Money structured facility will offer a flexible and powerful solution to help Gresham House further grow its solar capabilities. The Gresham House New Energy team has a proven track record in developing and operating onshore wind, solar PV, and energy storage, while Gresham House Asset management is focused on investing in transformative technologies and industries it believes will deliver strong financial returns alongside supporting the transition to a more sustainable world. The partnership with such a significant renewables investor further solidifies Virgin Money’s reputation within the space and evidences its commitment to sustainable lending.

Commenting on the deal, Wayne Cranstone, investment director at Gresham House, said: “This partnership with Virgin Money comes at a crucial time, as the UK ramps up efforts to meet its 2050 net-zero target. As host of the COP26 summit later this year, the country’s renewables capabilities will be firmly in the spotlight, and by expanding our solar operations, we hope to meaningfully contribute to the UK’s decarbonisation. By propelling us to the next stage of growth, this deal will further strengthen the fund’s attractive income proposition for investors.”

Keith Wilson, head of renewables at Virgin Money, said: “This transaction is among the bank’s most notable contract in the renewable energy sector to date. Working in partnership with Gresham House, we have delivered a bespoke and innovative funding solution, which both supports their strategic objectives and recognises their experience and reputation in the marketplace. In addition, the transaction directly supports our recently refreshed ESG strategy and the continued growth of our renewable energy lending book.”

Virgin Money’s £150m of investment in renewables lending to date, which includes hydro-electric power, power generation and wind farms, demonstrates its commitment to the sector. With targeted new lending projects on the horizon, the bank continues to act at speed to fulfil its strategic growth ambitions. The bank’s approach will also incorporate green products and funding, as well as addressing residual carbon. Virgin Money has begun engaging with customers, colleagues, and industry forums to accelerate thinking and build its plans in this area.