Investment in Ormonde Offshore Transmission
10 July 2012
Investment in Ormonde Offshore Transmission Project
International Public Partnerships Limited (INPP), the FTSE 250 listed infrastructure investment company, is pleased to announce that Transmission Capital Partners, the consortium comprising INPP, Amber Infrastructure and Transmission Capital, has achieved financial close and completed its investment in the Ormonde offshore transmission project.
INPP is investing 100% of the capital required for the investment totalling approximately £115 million. This investment was identified as a likely target as part of INPP's recent £200m Placing, Open Offer and Offer for Subscription by the Company which was concluded on 25 June.
This is the fourth 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.
The investment is in the transmission apparatus that connects the mainland to the Ormonde offshore wind farm, located in the Irish Sea, approximately 10km west from Walney Island, on the Cumbrian coastline. The asset comprises onshore and offshore substations and under-sea cables. The project has been operational since 2011, and is expected to provide immediate yield to INPP investors.
Key features of the project are:
· A 20 year revenue term, with the potential for extension after this initial period
· An availability based revenue stream, with protected downside (potential deductions capped at 10% of base revenue in any year), and fully linked to UK RPI
· An availability based revenue stream with no exposure (either revenue or penalties) to wind farm performance or credit
· Revenues contracted 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)
· A robust financial structure with no refinancing risk
· The asset has an established operating record.
Of the 9 projects awarded by Ofgem under the first round of bids, 5 OFTO projects have now reached financial close, with Transmission Capital Partners being responsible for 4 of them, reinforcing its reputation as a market leader in this asset class.
In May 2012, the consortium was also selected by Ofgem to be Preferred Bidder for the first of the second round of OFTO projects: Lincs OFTO is scheduled to reach financial close in the fourth quarter of 2012.
The consortium has also been shortlisted for a further two 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 £8bn are projected to be tendered to the private sector, during the next nine years.
Commenting on the acquisition Keith Dorrian, Chairman of INPP said: "INPP is delighted to be investing in this further offshore transmission asset and deploying further capital in the OFTO sector which we see as an appealing, accretive addition to our Portfolio. We are also pleased to be immediately putting to work part of the additional capital recently raised by the Company. "
Giles Frost, Director of Amber Infrastructure, Investment Advisor to INPP, said: "Ormonde represents the fourth OFTO closed by Transmission Capital Partners in the last 15 months with a total investment by INPP of over £145 million, reinforcing its leading position within the sector. We believe the stable, long-term revenue generation that will arise from these assets fits well with INPP's ongoing investment strategy."
A copy of the Ofgem press release can be found at www.ofgem.gov.uk
For further information:
Erica Sibree +44 (0)20 7939 0558
Amber Fund Management Limited
Hugh Jonathan/Nick Westlake +44 (0)20 7260 1263/1345
Numis Securities
Ed Gascoigne-Pees/Ed Berry +44 (0)20 7269 7132/7297
Financial Dynamics
Notes to Editors:
About International Public Partnerships:
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 119 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.
Visit the INPP website at www.internationalpublicpartnerships.com for more information.
About Amber Infrastructure Group:
Amber Infrastructure Group (Amber) is a leading international infrastructure specialist, providing asset management and investment advisory services in respect of over £4 billion of assets in the UK, Europe, Australia and North America. Amber's core business focuses on sourcing, developing, advising on, investing in and managing infrastructure assets within the utilities, PPP, transport, renewable energy and regeneration sectors.
Amber provides investment advisory services to International Public Partnerships
Limited as well as private investment funds, specialising in urban regeneration. Amber is headquartered in London with offices in Munich, Sydney, Melbourne and San Francisco and employs approximately 60 people, making it one of the largest
international infrastructure specialists.
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.
This information is provided by RNS
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