Turbines being installed on the Lincs wind farm in 2013
Green Investment Bank offshore wind fund snaps up 44 per cent stake in 270MW wind project, taking total assets under management to £1.12bn
The Green Investment Bank (GIB) Offshore Wind Fund has smashed its £1bn target thanks to the acquisition of a 44 per cent stake – worth £429m – in the 270MW Lincs offshore wind farm.
The deal, announced today, takes GIB Offshore Wind Fund’s total assets under management to £1.12bn. It represents the sixth and likely final investment of the fund into operating offshore wind farms in the UK, with other assets including stakes in the 576MW Gwynt y Môr farm, 90MW Rhy Dlats farm and 317MW Sheringham Shoal farm.
The total generating capacity of the fund – the world’s first dedicated offshore wind fund – is now 1.45GW, GIB said.
GIB bought its share of Lincs, located 8km off the coast of Lincolnshire near Skegness, from Centrica plc and Siemens Project Ventures, which developed the project in collaboration with Dong Energy. The farm has been in operation since 2013, generating enough clean electricity to power 200,000 homes.
Dong Energy will retain its major stake in the site, and take over operations and maintenance support from Centrica after a 12-month transitional period, GIB said.
Karl Smith, managing director of the GIB Offshore Wind Fund, welcomed the purchase. “We are delighted to be entering into the Fund’s first partnership with DONG Energy. Lincs joins a portfolio of five other assets, producing returns consistent with those expected from the Fund investors,” he said in a statement.
Launched in 2014, the GIB Offshore Wind Fund aimed to make it easier for pension funds and insurance companies to invest in the UK’s growing offshore wind sector. GIB claims it has made a success of this mission, attracting new investors to offshore wind including five UK local authority pension funds. Other major investors include Swedish life insurance and pension company AMF Pensionsförsäkring AB, and a major Middle Eastern sovereign wealth fund.
“In setting up an offshore wind fund GIB has created an innovative way to connect deep pools of long term capital to UK green infrastructure projects,” Shaun Kingsbury, chief executive of the GIB, said in a statement. “In a short period of time we have successfully raised our first fund and fully invested its capital, passing our £1bn target.”
Emma Pinchbeck, RenewableUK’s executive director, said the investment from pension funds in wind energy was proof of how predictable the benefits of renewables had become.
“Offshore wind farms off our coastline are providing power for consumers and reliable returns for the British economy,” she said. “We hope that this signals the start of even more local people benefitting from investing in wind energy projects.”
However, the milestone investment comes during a turbulent time for the GIB, which is on the brink of being sold into the private sector.
Fears are mounting that the likely buyer of the GIB, Australian bank Macquarie, is planning to strip the organisation of its assets. Earlier this week Climate Change Minister Nick Hurd was questioned about the sale in the House of Commons, with MPs from across the political spectrum calling on him to pause or abandon the planned sell-off.