The portfolio comprises 24 operational solar farms developed under the Renewables Obligation scheme. The sites also benefit from 14-year power purchase agreements.

Vortex plans to refinance the existing non-recourse project debt facility with a new upsized facility. The company will enter into new contracts with Lightsource Renewable Energy for operations & maintenance and management services.

TerraForm expects to use the transaction proceeds to improve its liquidity position and reduce its net debt. 

After completion, the company expects to reduce non-recourse project debt on its balance sheet by about $370m.

TerraForm Power chairman and interim CEO Peter Blackmore said: "The TerraForm Power Board and management team continues to execute on our key strategic initiatives, including fleet optimization and deleveraging, and this transaction demonstrates our progress in positioning the Company for value creation.

"Given the strong demand for operational United Kingdom solar plants, we are pleased to capitalize on the opportunity to monetize the high-quality portfolio of solar plants that our team has assembled and strengthened over the last two years and generate significant value for our shareholders."

EFG Hermes Private Equity head Karim Moussa said: "The United Kingdom is a key contributor to Europe's solar market. This Portfolio offers us an attractive entry point with a long-term investment proposition in the country.

“Our existing asset base in Vortex paid superior cash yields to our investors to date. We are delighted to add this high quality Portfolio to the platform and bring in the United Kingdom's premier solar developer as our technical partner."

The transaction is expected to be completed in the first half of 2017, subject to certain precedent conditions. After the deal's completion, TerraForm will continue to own an 11MW operating plant.

Citi served as exclusive financial advisor and Linklaters, LLP acted as counsel to TerraForm Power.  Watson Farley & Williams acted as counsel to Vortex Solar.

Image: TerraForm Power to sell 365MW of UK solar portfolio to Vortex. Photo: Courtesy of franky242/FreeDigitalPhotos.net.