Edinburgh-based Green Investment Bank Offshore Wind Fund and funds managed by BlackRock have acquired GLID Wind Farms TopCo Ltdd from Centrica and EIG Global Energy Partners in a transaction worth £423 million.
Centrica’s share of the proceeds is £115 million – generating a profit of £70 million on the investment.
The Fund will now own 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 remaining 39% of the projects.
The transaction marks the first time that operating offshore wind farms in the UK have been 100% owned by non-utility investors.
Complete ownership of GLID’s other operating asset, the 26MW Glens of Foudland onshore wind farm in Aberdeenshire will be transferred to the funds managed by BlackRock.
An existing power purchase agreement (PPA) will see Centrica purchase 100% of the power produced by the wind farms and 50% of the Renewable Obligation Certificates (ROCs) until 2024. Centrica will continue to provide operations and maintenance (O&M) support to the projects until March 2017.
The Fund, managed by UK Green Investment Bank Financial Services Limited (GIBFS), is the largest private renewable energy fund in the UK with current capital commitments of £818 million. Its portfolio now consists of five assets which, taken together, are capable of producing 3,970 GWh of net renewable electricity annually.
Karl Smith, Fund Managing Director, UK Green Investment Bank Financial Services Limited, 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.”
Rory O’Connor, Managing Director, BlackRock, 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.”
Centrica, which is Britain’s largest supplier of household energy, trades as Scottish Gas in Scotland, is currently being re-organised by chief executive Iain Conn, who was born in Edinburgh. A Fellow of the Royal Society of Edinburgh, he previously worked in senior manager with BP.