Barrow Offshore Transmission Project

RNS Number : 0221P

International Public Partnership Ld

27 September 2011

 

27 September 2011

Barrow Offshore Transmission Project Reaches Financial Close

-    Transmission Capital Partners Closes Third OFTOs Scheme -

International Public Partnerships Limited (INPP) is pleased to announce that Transmission Capital Partners, the consortium comprising INPP, Amber Infrastructure and Transmission Capital, has achieved financial close on the Barrow offshore transmission project.

This is the third offshore transmission project that Transmission Capital Partners has closed under Ofgem's initial round of nine tenders for the long-term licence and operation of offshore transmission assets in the United Kingdom.

Barrow is an offshore wind farm, located in the east Irish Sea approximately 7km south west from Walney Island off the Cumbria coast, UK with a generation capacity of approximately 90MW. The asset comprises the onshore and offshore substations and under-sea cables connecting the mainland electricity grid network to Barrow wind farm. The project has been operational since 2006, which will allow for an immediate yield to INPP investors.

Key features of the project are:

·     18.5 year revenue term, with the potential for extension after this initial period

·     Availability based revenue stream, with protected downside (potential deductions capped at 10% of base fee in any year), and fully linked to UK RPI

·     No demand based risk with no exposure (either revenue or penalties) to wind farm performance or credit

·     Revenues guaranteed by National Grid Electricity Transmission plc (NGET), a subsidiary of National Grid, in their statutory ring-fenced role as national electricity systems operator (NGET rated 'A-' S&P; 'A' Fitch)

·     Robust financial structure with conservative gearing and debt in place for the duration of the concession, ensuring no refinancing risk

·     No construction risk, given the operational status of the project

INPP is investing 100% of the equity and subordinated debt totalling approximately £8 million. Senior debt has been provided by Barclays, BNP Paribas and Lloyds.

The Transmission Capital Partners consortium has successfully bid for four of the nine offshore transmission projects awarded by Ofgem under its initial round of tenders, underlining its technical and operational strength and experience of the rapidly growing asset class. It is scheduled to reach financial close on the remaining scheme by the end of 2011. 

The consortium is also shortlisted for another three projects under Ofgem's second round of tenders, which are due to be awarded in 2012. New opportunities with a total development value of up to £14bn are expected to be tendered to the private sector, during the next nine years.

Commenting on the acquisition Keith Dorrian, Chairman of INPP said:  "The scale and market opportunity within this specialist area of the renewable sector provides our shareholders with exposure to an asset class with significant growth potential and the Company remains well positioned for further success within this burgeoning market."

Giles Frost, Director of Amber, Investment Advisor to INPP, said: "The Transmission Capital consortium has reached another landmark in closing its third offshore transmission project. The stable, long-term revenue generation from these assets fits well with our ongoing investment strategy."

A copy of the Ofgem press release can be found at www.ofgem.gov.uk

For further information:

Erica Sibree                                                    [phone]
Amber Fund Management Limited                                

Hugh Jonathan/Nick Westlake                            [phone]/1345
Numis Securities       

Ed Gascoigne-Pees/Ed Berry                              [phone]/7297
FTI Consulting

Notes to Editors:

About International Public Partnerships (INPP):

International Public Partnerships Limited (INPP) is a listed infrastructure investment company which invests in global public infrastructure projects developed under the public private partnerships (PPP) and private finance initiative (PFI) procurement methods.

Listed in 2006, INPP is a long-term investor in 109 social and transport infrastructure projects, including schools, hospitals, courts, police headquarters, transport and renewable energy projects in the U.K., Europe, Australia and Canada. INPP seeks to provide its shareholders with both a long-term government-backed yield and capital growth through investment across both construction and operational phases of 25-40 year concessions.

Amber Infrastructure Group (Amber) is the Investment Advisor to INPP and consists of more than 50 dedicated infrastructure specialists which originate and source a strong pipeline of projects for INPP.

Visit the INPP website at www.internationalpublicpartnerships.com for more information.

About Transmission Capital:

Transmission Capital was established in 2008 to procure, construct, own and operate transmission assets, initially those in the UK being tendered through the new offshore transmission regulatory regime being overseen by Ofgem.  It also provides transmission development advisory services to electricity industry stakeholders, including many offshore wind developers.  The senior management team has over 70 years experience in the UK electricity supply industry, the majority of which has been focussed on the development, procurement and construction of major offshore transmission and wind projects.

 

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