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LCA invests GBP500,000 into project developer Vigor Renewables

Low Carbon Accelerator has invested GBP500,000 in Vigor Renewables in the form of non-voting preference shares with rights over 90 per cent of the distributable profits.

The ordinary shares are held by the management of Vigor, with rights over the balance of the distributable profits.

Vigor is a new company formed to take advantage of UK feed-in-tariffs. It aims to partner with landowners, as well as commercial property owners and managers, to build, own and operate wind and solar power generating assets on sites across the UK.

Each asset will be designed and built to qualify for the recently announced UK feed-in-tariffs which come into effect at the beginning of April 2010. The tariffs guarantee an inflation linked income for sub-5MW renewable energy projects, payable to the developer for 20 years in the case of wind developments and 25 years for solar, in addition to the power export and off-take arrangements.

Vigor will design, build, own and operate the installations, while the site owner will receive either rental income or discounted electricity prices for the duration of the feed-in-tariff payment period.

Vigor has identified a strong pipeline of potential deal-flow and is currently in negotiation on options for over 15 sites including agricultural plots for small-scale wind projects and industrial sites for solar projects based on roof and land space. The first project is scheduled to start during the summer of 2010. Each project is likely to take between three and six months to complete, from site identification to power generation.

Oliver Hughes, managing director of Vigor Renewables, says: “The feed-in-tariff has created a wealth of opportunity for renewable energy developers in the UK. We’re pleased that LCA, as a pioneer in clean-tech investment, has recognised this opportunity and the return potential for investors and for property and land-owners. We’ve seen a significant number of renewable energy opportunities across the UK. There’s no reason why farmers and commercial property owners can’t become small-scale power producers in their own right. We look forward to a highly productive partnership.”

Dr Steve Mahon, chief investment officer for Low Carbon Investors, the investment manager for Low Carbon Accelerator, adds: “Vigor is an exciting investment for LCA, and should provide long-term stable income from each of its projects in a relatively short space of time. It is also a great opportunity to transform the UK building infrastructure and agricultural industry from users of power to active and profitable generators. Supply side policies such as feed-in-tariffs are exactly what is needed to encourage investment back into our energy infrastructure and we are pleased to be supporting the UK’s energy-entrepreneurs.”

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