Blackrock, Lightsource target 1 bln stg UK solar power portfolio

LONDON, July 25 (Reuters) - Asset manager Blackrock (Xetra: 1005182.DE - news) and solar energy firm Lightsource have agreed to jointly create a 1 billion pound ($1.3 billion) portfolio of solar power assets in Britain over the next three years, the two companies said on Tuesday.

The partnership, called Kingfisher (Frankfurt: 812861 - news) , will initially include 25 of Lightsource's British solar assets with a combined capacity of 156 megawatts (MW), which have already secured government subsidies for their power production.

The tie-up comes amid growing demand from institutional investors to access so-called 'real assets' such as energy infrastructure, keen to tap the steady income streams on offer at a time of lower returns in some financial markets.

"We believe this market continues to present attractive opportunities for institutional investors," Rory O'Connor, Managing Director and Head of Renewable Power for Europe at BlackRock (Sao Paolo: BLAK34.SA - news) said in a statement.

BlackRock, which manages $5.7 trillion in assets, currently invests $30 billion across a range of real estate and infrastructure assets.

Falling costs have seen Britain's solar power industry expand over the past few years to around 12,000 MW of capacity, up from around 2,000 MW five years ago.

Assets with a further 50 MW of capacity in Northern Ireland, which have also secured subsidies, will be added to the portfolio later in the year once they begin operation, and the venture is targeting a total capacity of around 1,000 MW.

Solar power (Other OTC: SOPW - news) output in Britain hit a record high of 8,700 MW earlier this year, providing 24 percent of the country's electricity supplies at the peak.

($1 = 0.7652 pounds) (Reporting by Susanna Twidale; Editing by Mark Potter)