Investment in Sheringham Shoal Offshore Wind Farm
27 December 2017
The Renewables Infrastructure Group Limited
("TRIG" or the "Company", a London-listed investment company advised by InfraRed Capital Partners as Investment Manager and RES (Renewable Energy Systems) as Operations Manager)
Investment in Sheringham Shoal Offshore Wind Farm
· TRIG has completed an investment of approximately c.£80 million to acquire a 14.7% indirect equity interest in the 316.8MW Sheringham Shoal Offshore Wind Farm in the North Sea (the "Transaction")
· The Transaction increases TRIG's portfolio net generating capacity by approximately 47MW to 820MW
· The Project has an established operating history and earns its revenues predominantly under the ROC regime at a rate of 2.0 ROCs per MWh until 2032
· This represents TRIG's first allocation to the offshore wind sector and is consistent with TRIG's strategy of investing in long-term income-producing projects
The Board of TRIG is pleased to announce that the Company has completed an investment to acquire a 14.7% indirect equity interest in the Sheringham Shoal Offshore Wind Farm, a 316.8MW project located in the North Sea off the coast of Norfolk (the "Project").
This acquisition, TRIG's first investment in an offshore wind project, was made for a total consideration of approximately £80 million (including transaction costs). The investment, giving TRIG an indirect equity interest in 14.7% of the Project, is in a new joint venture holding company alongside funds managed by Equitix Limited (representing 25.3% of the equity). The other equity partners in the Project comprise Statoil ASA (40%) and Green Investment Group, managed by Macquarie Group (20%).
The Project originally developed by Statoil, has an established operating history following its commissioning in 2012 and comprises 88 Siemens 3.6MW turbines. It earns revenues predominantly from the sale of Renewables Obligation Certificates, at a rate of 2.0 ROCs per MWh until 2032, and from wholesale power sales. The Project has long-term power purchase agreements in place. The Project further benefits from a long-term O&M contract with Statoil.
TRIG's investment has been financed from a drawdown of the Group's revolving acquisition facility (which is now approximately £106m drawn). The joint venture holding company has structured financing in place with term loans arranged by National Australia Bank and Goldman Sachs with a loan-to-value of approximately 63%. The loans are fully amortising within the subsidy period. The underlying wind farm has no additional leverage.
TRIG's portfolio now consists of 57 projects and will have an aggregate net output capacity (pro rata to its equity interests in the underlying project) of approximately 820MW also taking into account TRIG's Broxburn energy storage project which is expected to complete in April 2018.
TRIG's Investment Manager, InfraRed Capital Partners, and its Operations Manager, RES, are experienced in developing and investing in offshore wind in the UK and Continental Europe. The investment in Sheringham Shoal adds to the diversification of Company's portfolio and will further enhance TRIG's ability to source and execute additional investments in the expanding and maturing offshore wind market.
Helen Mahy CBE, Chairman of TRIG, said:
"The Board of TRIG is delighted to conclude the Company's first investment in offshore wind, an industry in which the UK has built a leading global market share and which is expected to contribute a significant proportion of the UK's renewable energy capacity build-out in the medium-term.
In the last few years TRIG and its Managers have evaluated several projects in the offshore wind sector, which has matured into a highly sought-after institutional investment category. TRIG's partnership on Sheringham Shoal, alongside investors with significant experience in renewables and in broader energy markets, represents an ideal first step for TRIG in this space. The project is accretive to TRIG's portfolio returns and has the higher 2.0 ROCs per MWh subsidy and a proven operating history."
Enquiries
InfraRed Capital Partners Limited +44 (0) 20 7484 1800
Richard Crawford
Matt Dimond
Tulchan Communications +44 (0) 20 7353 4200
Martin Pengelley
Latika Shah
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 6.40 pence per Ordinary Share for the year to 31 December 2017.
TRIG is invested in a portfolio of 57 renewables projects (including wind, solar PV and power storage projects) in the UK, France and the Republic of Ireland, with aggregate net output capacity of 820MW following completion of construction of the 20MW Broxburn project. TRIG is seeking further suitable investment opportunities which fit its stated Investment Policy.
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 and Sydney. With over 130 professionals it manages in excess of USD10 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 70 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. Besides the current investment by TRIG in the Sheringham Shoal offshore wind farm, InfraRed has advised its private equity infrastructure funds on their investment alongside an international consortium in the development of a 396MW offshore wind development in Germany, Merkur Offshore.
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 long-standing signatory of the Principles of Responsible Investment under which InfraRed is rated A+, the highest level, for both infrastructure and real estate, as well as for overall strategy and governance.
Further details can be found on InfraRed's website at www.ircp.com.
Operations Manager
TRIG's Operations Manager is RES (Renewable Energy Systems Limited), the world's largest independent renewable energy company.
RES has been at the forefront of wind energy development for 35 years, with the expertise to develop, engineer, construct, finance, and operate projects around the globe. RES has developed or constructed more than 250 wind, solar, energy storage and transmission projects totalling over 13GW in capacity. It has been working in the offshore wind sector since 2001 and is currently involved the development, construction and/or operation of 6GW of offshore wind assets worldwide. Headquartered in Hertfordshire, UK, RES operates in 10 countries and has over 1,900 employees engaged in renewables globally.
Further details can be found on RES' website at www.res-group.com.
This information is provided by RNS
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