The UK Green Investment Bank (GIB)'s offshore wind fund has completed its latest deal, with the bank today announcing it has teamed up with asset manager BlackRock to buy the Glid group of wind farms from energy giant Centrica.
The £423m deal sees ownership of the 194MW Lynn and Inner Dowsing offshore wind farms in Lincolnshire transferred from "Big Six" utility Centrica and EIG Global Energy Partners to the two funds, with the GIB taking a 61 per cent stake and BlackRock-managed funds owning the remaining 39 per cent.
Under the deal, BlackRock-managed funds will also assume ownership of Glid's other operating asset, the 26MW Glens of Foudland onshore wind farm in Aberdeenshire, Scotland.
The move marks the first time that operating offshore wind farms in the UK have been fully owned by non-utility investors. The acquisition brings the number of assets owned by the UK Green Investment Bank Financial Services Limited (GIBFS), which manages the GIB offshore fund, to five. The company said that collectively the assets were capable of producing 3,970GWh of clean power a year.
"The unique partnership that we have entered into demonstrates the ability of the Offshore Wind Fund to capitalise on opportunities presented by the UK offshore wind sector, as well as highlighting the quality of existing assets in UK waters," said Karl Smith, fund managing director of GIBFS, in a statement.
The deal also underlines BlackRock's growing commitment to the renewables sector. The investment firm, which is the world's largest money manager, said it now owns and manages 66 wind and solar projects in Europe and North America on behalf of its clients.
"This landmark transaction demonstrates BlackRock's significant investment programme in the UK renewables sector," said Rory O'Connor, managing director of BlackRock, in a statement. "For investors, the sector can provide opportunities for less correlated, inflation-linked, long-duration income and attractive risk-adjusted returns."
Centrica's net share of proceeds will be around £115m after repayment of debt associated with Glid and other costs, Reuters reported today.
An existing power purchase agreement (PPA) will see Centrica continue to purchase all power produced by the wind farms until 2024, as well as half of their Renewable Obligation Certificates (ROCs). Centrica will also continue to provide operations and maintenance support to the projects until March 2017.
The deal represents a further boost to the UK offshore wind industry, after leading developer DONG Energy announced this week that it would proceed with plans to build the world's largest offshore wind farm off the coast of Yorkshire.
The company said it would move forward with the 1.2GW Hornsea Project One development, predicting that it would provide clean power to well over one million homes when it comes online by 2020.
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