Acquisition of interest in German offshore wind
10 December 2019
The Renewables Infrastructure Group Limited
("TRIG" or "the Company", a London-listed investment company advised by InfraRed Capital Partners ("InfraRed") as Investment Manager and RES ("Renewable Energy Systems") as Operations Manager)
Acquisition of interest in Merkur Offshore wind farm in Germany
The Board of TRIG is pleased to announce that the Company has exchanged contracts to acquire a c.36% equity interest in Merkur Offshore, a 396MW operational offshore wind farm located in the German North Sea ("the Project").
TRIG has partnered for the acquisition with the Dutch pension investor APG, who will acquire the remaining c.64% in the Project. At, or shortly after the completion of the transaction (expected in H1 2020), which is subject to lender consent and competition clearance, TRIG intends to sell-down a share to minority co-investors managed by InfraRed, leaving TRIG with an approximate 25% equity interest in the Project. This is consistent with TRIG's strategy of partnering with aligned co-investors on larger transactions. Once completed, this investment is expected to represent approximately 8% of TRIG's portfolio value.
The Project comprises 66 GE Haliade-150 6MW offshore wind turbines and GE Renewable Energy provides Operations & Maintenance ("O&M") services under a 10-year contract. Commercial operations commenced in June 2019 and the Project benefits from an attractive Feed-in-Tariff for the next 13.5 years (until June 2033), followed by a floor price for a further 6 years. The existing debt financing in the Project is fixed rate and fully amortising within the initial subsidy period.
The investment is being acquired from a consortium of Partners Group (on behalf of its clients), DEME Concessions, GE Energy Financial Services, ADEME and a private fund separately managed by InfraRed. Due to one of the vendors being a fund managed by InfraRed, TRIG's Investment Manager, the transaction process included the procedures set out in the Company's investment policy and recent prospectuses, these include the conduct of independent due diligence by a specially constituted buy-side committee and an independent third-party valuation and approval by TRIG's Board of Directors, all of whom are independent of the Investment Manager.
TRIG's investment will be financed from a combination of the proceeds of its recent capital raising and a drawdown from the Group's revolving acquisition facility.
Helen Mahy CBE, Chairman of TRIG, said:
"The Board of TRIG is delighted to announce the Company's third offshore wind investment and our second investment in Germany. We are pleased to be growing our presence in the European offshore wind market which is making an increasingly important contribution to the decarbonisation of energy usage."
Richard Crawford, of InfraRed Capital Partners, said:
"We welcome this opportunity to become co-investors alongside APG, a highly respected investor with a strong track record. Building effective relationships with developers, partners and asset managers remains essential for TRIG's ability to access these attractive larger transactions."
Enquiries
InfraRed Capital Partners Limited +44 (0) 20 7484 1800
Richard Crawford
Phil George
Maitland/AMO +44 (0) 20 7379 5151
James Isola
Zara de Belder
Notes
The Company
The Renewables Infrastructure Group ("TRIG" or the "Company") is a leading London-listed renewable energy infrastructure investment company. The Company seeks to provide shareholders with an attractive long-term, income-based return with a positive correlation to inflation by focusing on strong cash generation across a diversified portfolio of predominantly operating projects. TRIG is targeting an aggregate dividend of 6.64 pence per Ordinary Share for the year to 31 December 2019.
TRIG is invested in a portfolio of over 70 wind, solar and battery storage projects with aggregate net generating capacity of 1,629MW. TRIG is seeking further suitable investment opportunities which fit its stated Investment Policy. Once the Merkur transaction is fully completed, c.14% of the portfolio is expected to be invested in Germany, taking the European proportion of the portfolio value to c.46%.
Further details can be found on TRIG's website at www.trig-ltd.com.
Investment Manager
TRIG's Investment Manager is InfraRed Capital Partners Limited ("InfraRed") which has successfully invested in over 200 infrastructure projects since 1997. InfraRed is a leading international investment manager focused on infrastructure and real estate. It operates worldwide from offices in London, Hong Kong, New York, Seoul, Sydney and Mexico City. With over 190 professionals it manages in excess of USD 12 billion of equity capital in multiple private and listed funds, primarily for institutional investors across the globe. InfraRed is authorised and regulated by the Financial Conduct Authority.
The infrastructure investment team at InfraRed consists of over 85 investment professionals, all with an infrastructure investment background and a broad range of relevant skills, including private equity, structured finance, construction, renewable energy and facilities management.
InfraRed implements best-in-class practices to underpin asset management and investment decisions, promotes ethical behaviour and has established community engagement initiatives to support good causes in the wider community. InfraRed is a signatory of the Principles of Responsible Investment.
Further details can be found on InfraRed's website at www.ircp.com.
Operations Manager
TRIG's Operations Manager is RES ("Renewable Energy Systems"), the world's largest independent renewable energy company.
RES has been at the forefront of wind energy development for over 37 years, with the expertise to develop, engineer, construct, finance and operate projects around the globe. RES has developed or constructed onshore and offshore wind, solar, energy storage and transmission projects totalling more than 17GW in capacity. RES supports over 5.5GW of operational assets worldwide for a large client base. Headquartered in Hertfordshire, UK, RES is active in 10 countries and has over 2,000 employees engaged in renewables globally.
RES is an expert at optimising energy yields, with a strong focus on safety and sustainability. Further details can be found on the website at www.res-group.com.
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