Acquisition of New Asset

RNS Number : 9207R

Greencoat UK Wind PLC

14 March 2016

 

14 March 2016

Acquisition of 49.9% of Clyde Wind Farm from SSE for £355 million

Increase in Greencoat UK Wind's net generating capacity to 399 MW

The Board of Greencoat UK Wind PLC ("UKW") is pleased to announce that it has entered into an agreement to acquire 49.9% of Clyde Windfarm (Scotland) Limited ("Clyde") from SSE for a headline consideration of £355 million, together with GMPF & LPFA Infrastructure LLP ("GLIL"), the infrastructure investment joint venture between Greater Manchester Pension Fund ("GMPF") and London Pensions Fund Authority ("LPFA"). UKW will acquire 28.2% of Clyde and GLIL will acquire 21.7%. SSE will continue to hold 50.1%.

Clyde is located in South Lanarkshire and consists of the Clyde North, Clyde South and Clyde Central wind farms, with a combined generating capacity of approximately 350 MW and a net load factor of 33.0%. Clyde North consists of 47 Siemens 2.3 MW turbines with a total capacity of 108 MW and is ROC accredited from August 2012. Clyde Central consists of 49 Siemens 2.3 MW turbines with a total capacity of 113 MW and is ROC accredited from January 2012. Clyde South consists of 56 Siemens 2.3 MW turbines with a total capacity of 129 MW and is ROC accredited from July 2011. All were developed by SSE and receive 1 ROC per MWh. SSE will continue to operate the assets with Siemens providing turbine operation and maintenance.

SSE is in the process of constructing Clyde Extension, which will consist of 54 Siemens 3.2 MW turbines with a total capacity of approximately 173 MW and an expected net load factor of 37.8% and will receive 0.9 ROCs per MWh. SSE is providing a construction wrap: once Clyde Extension is operational, UKW's and GLIL's shareholding in Clyde will be diluted (with an implied Clyde Extension value of £467 million subject to certain adjustments). Under the Shareholders' Agreement, UKW and GLIL have a Right of First Offer.

Tim Ingram, Chairman of UKW, commented: "We are pleased to announce UKW's latest acquisition, which will deliver an attractive investment return, in line with the existing portfolio. We are delighted to extend our relationship with SSE and co-own Clyde, one of the largest onshore wind farms in the UK."

Laurence Fumagalli of Greencoat Capital added: "There remains an exciting pipeline of future acquisition opportunities and we believe that our model positions us competitively in the market to acquire operational assets and makes us an attractive partner for utility vendors."

Paddy Dowdall, Assistant Executive Director, GMPF said: "We are excited to be investing alongside Greencoat UK Wind and SSE in this venture. This investment offers us attractive returns, complements our growing renewable portfolio and continues our commitment to investing directly in British infrastructure."

The acquisition, which is expected to complete on 18 March 2016, will be funded by a £165 million utilisation under UKW's revolving credit facility, an increase of £25 million in UKW's fixed-rate loan with the Commonwealth Bank of Australia, £5 million from UKW's cash resources, plus Clyde cash balances. Following completion of the acquisition, at £325 million, UKW's total outstanding debt is expected to be approximately 38% of Gross Asset Value (leverage limit 40%).

Contacts:

Greencoat UK Wind PLC                                                                                 020 7832 9400

Stephen Lilley

Laurence Fumagalli

Tom Rayner

Tulchan                                                                                                           020 7353 4200

Stephen Malthouse

Charlotte Church

London Pensions Fund Authority                                                                    020 7369 2656

Bart Nash

Greater Manchester Pension Fund                                                                  0161 342 3905

Darrell Beck

Notes to Editors:

About Greencoat UK Wind

Greencoat UK Wind PLC is the leading renewable infrastructure fund, solely and fully invested in eighteen operating UK wind farms with net generating capacity of 399 MW (including the acquisition of Clyde). The Company's aim is to provide investors with an annual dividend that increases in line with RPI inflation (6.34p for 2016) while preserving the capital value of its investment portfolio in the long term on a real basis through reinvestment of excess cash flow and the prudent use of portfolio leverage.

UKW is managed by an experienced team of senior executives from Greencoat Capital LLP, the cleantech and renewables focused investment management firm, and overseen by a strong and experienced independent board.

UKW is incorporated in England and Wales and is a UK Investment Trust.

For more information about UKW, please visit http://www.greencoat-ukwind.com

For more information about Greencoat Capital LLP, please visit http://www.greencoat-capital.com

About GLIL

The GMPF & LPFA Infrastructure LLP is a joint venture between the Greater Manchester Pension Fund and London Pensions Fund Authority, established to increase their exposure to infrastructure, deliver long-term returns that match their liabilities and provide much needed investment in major UK infrastructure projects. The Partnership was formed in April 2015 and seeded with £500 million of commitments from the two pension funds. GLIL completed its first transaction in October 2015 with a £60 million investment into the renewable energy sector.

The consortium was advised by Linklaters, MMS, RBC, Mott MacDonald and PWC.

 

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