Centrica and EIG sell offshore wind farms

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Centrica and EIG sell offshore wind farms

Centrica and its 50% joint venture partner EIG Global Energy Partners (EIG) have agreed a joint sale of the Glens of Foudland, Lynn and Inner Dowsing wind farms (GLID) to a consortium, comprising the United Kingdom based Green Investment Bank Offshore Wind Fund and funds managed by BlackRock, for an enterprise value of US$610 million.

The Green Investment Bank Offshore Wind Fund will now own a 61% stake in the 194 MW offshore wind farm Lynn and Inner Dowsing. The funds managed by BlackRock will own the remaining 39% shares of the projects.

Additionally, the 26 MW Glens of Foudland onshore wind farm will be fully transferred to the funds managed by BlackRock.

The Lynn and Inner Dowsing wind farms are a pair of  wind farms located in the North Sea, at the entrance to The Wash off the coast of Lincolnshire, England. The wind farms were developed as a single unit after planning consent was given in 2003. Construction work began in 2006 and was completed in 2009.

The farm has a maximum output of 194 MW from 54 Siemens wind power turbines 3.6-107 meters diameter and a hub height of 85 meters covering an area of 2,000 hectares. Power is transmitted via sub-sea cables to shore and then by underground cables to the new substation at Middlemarsh, Skegness. The farm generates enough electricity for half the homes in the county of Lincolnshire.

The Glens of Foudland onshore wind farm is situated on Aberdeenshire, Scotland. The farm has a maximum output of 26 MW from 20 Bonus B62/1300. Each steel turbine tower is 46 meters high and the reinforced glass-fibre rotor blades have a total diameter of 62 meters and a tip height of 78 meters.

Since it began operations in 2005 the 26 MW farm has generated enough power each year to supply around 14,000 households which represents 12% of the homes in Aberdeenshire.

Centrica will continue with the 100% purchase of the power produced by the wind farms and 50% of the Renewable Obligation Certificates (ROCs) until 2024. Moreover, Centrica will continue to provide operations and maintenance (O&M) support to the projects until March 2017.

Karl Smith, UK Green Investment Bank Financial Services Fund Manager, said:

The unique partnership that we have entered into demonstrates the ability of the Offshore Wind Fund to capitalize on opportunities presented by the UK offshore wind sector, as well as highlighting the quality of existing assets in UK waters.

Rory O'Connor, BlackRock Managing Director, said:

This landmark transaction demonstrates BlackRock’s significant investment program in the UK renewables sector. For investors, the sector can provide opportunities for less correlated, inflation-linked, long-duration income and attractive risk-adjusted returns.

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