IPPToday #315: US$400 million offshore transmission project in the UK reaches financial close
- International Public Partnerships (INPP)
- Amber Infrastructure Limited
- Transmission Investment
- Equinor (formerly Statoil)
- China Resources (Holdings) Co., Ltd
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Transmission Capital Partners (TCP), a consortium comprising International Public Partnerships Limited (INPP), Amber Infrastructure Group and Transmission Investment, has successfully reached financial close for the long-term ownership and operation of the transmission link to the 402 MW Dudgeon offshore wind farm in the North Sea.
Located 32km off the coast of Cromer in North Norfolk, the Dudgeon offshore transmission system transmits clean power generated by 67 6 MW offshore wind turbines to over 410,000 UK homes. It includes an offshore substation platform, offshore and onshore AC export cables, and an onshore substation.
INPP will make a c.GBP46 million (US$60 million) investment for 100% of the equity and subordinated debt of the transmission system, with the senior debt for the project of c.GBP273 million (US$355 million) provided through a public bond listed on the Irish Stock Exchange, which received a (P)Baa1 rating from Moody’s.
INPP's investment has been funded with proceeds from the capital raise the company conducted in October 2018.
The offshore transmission system is currently operational under the ownership of Equinor ASA, Masdar and China Resources (Holdings) Co. Ltd., the owners of the wind farm to which the system is connected.
TCP was selected by UK energy regulator Ofgem to own and operate the assets through a tender process, the fifth tender round of the offshore regulatory regime for licensing offshore electricity transmission. Earlier this month, TCP was granted a license to own and operate the Dudgeon system, making the project the first from the fifth tender round to achieve this milestone.
The operations of the transmission assets will be subcontracted to the wind farm owners to maintain (and repair) the assets at its own cost. TCP will benefit from a 20-year availability-based revenue stream with protected downside whereby maximum potential deductions will be capped at 10% of base revenue in any year.