Smart Power | Planning considerations, transition to SONIA and RPI rent review clauses

Written on 13 Jul 2021

Welcome to the second edition of Smart Power, Osborne Clarke's specialist service for asset managers within the green energy sector.

What are the top five planning considerations for asset managers?

Compliance with planning during the lifetime of an asset may appear to be passive, but there are often ongoing obligations for investors and asset managers. As well as potential risks, planning law can offer an asset manager opportunities to enhance an asset and/or protect its value. But how?

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What does the transition to SONIA mean for investors in debt-financed energy projects?

We answer some frequently asked questions and do a spot of jargon-busting to help you understand how the SONIA – that's the Sterling Overnight Index Average – transition will impact your energy projects and better equip you for conversations with your lenders.

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Property: what can I do about the 'double compounding' RPI rent review clause in my lease?

Many green energy portfolios in the UK include at least one asset which is blighted by a lease that contains a "double compounding" retail price index (RPI) rent review clause (DCRR). The effect of a DCRR is to "cumulatively compound" the annually revised rent, with the result that over the term of the lease the annual rent increases far in excess of inflation, before becoming unaffordable at a point long before the end of the term. A DCRR can have a significant, and in some cases, catastrophic impact on the value of the affected asset.

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