Green Investment Bank in £423m windfarm acquisition

A consortium comprising of the UK Green Investment Bank (GIB) Offshore Wind Fund and funds managed by New York investment firm BlackRock, has acquired three UK wind farms in a deal worth £423m.

The GIB fund will take control of a 61% stake in the 194 MW, 54 turbine Lynn and Inner Dowsing offshore wind farms located off the coast of Lincolnshire.

The BlackRock-managed funds will own the other 39% of the projects, as well as the 26MW Glens of Foudland onshore wind farm in Aberdeenshire.

The transaction, which was advised on by law firm Eversheds, marks the first time that operating offshore wind farms in the UK have been 100% owned by non-utility investors.

‘Promising sector’

The UK GIB Offshore Wind Fund is the largest private renewable energy fund in the UK with current capital commitments of £818m. Its portfolio now consists of five assets that, taken together, are capable of producing 3,970 GWh of net renewable electricity annually.

Fund managing director Karl Smith said: “The unique partnership that we have entered into demonstrates the ability of the Offshore Wind Fund to capitalise on opportunities presented by the UK offshore wind sector, as well as highlighting the quality of existing assets in UK waters.”

Blackrock – the world’s largest asset manager with more than $4.5trn under management – now owns and manages 66 wind and solar projects in Europe and North America on behalf of its clients.

BlackRock managing director Rory O’Connor said: “This landmark transaction demonstrates BlackRock’s significant investment programme in the UK renewables sector. For investors, the sector can provide opportunities for less correlated, inflation-linked, long-duration income and attractive risk-adjusted returns.”

The sellers

The wind projects are being purchased from British Gas owner Centrica and EIG Global Energy Partners. Centrica’s net share of the proceeds will be approximately £115m.

Centrica will continue to purchase 100% of the power and 50% of the Renewable Obligation Certificates (ROCs) from the three wind farms under existing power purchase agreements (“PPAs”) until 2024.

“The sale is in line with Centrica’s strategy to dispose of its interests in wind power generation, while continuing to purchase wind power,” the company said in a statement.

Earlier this week, the world’s largest offshore wind farm was given the green light to be built 75 miles off the coast of Yorkshire.

Brad Allen

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