Enbridge has announced the acquisition of a 24.9 percent interest in the 400 megawatt (MW) Rampion Offshore Wind Project in the UK. The company's total investment in the project is expected to be CAD$750 million (US$565 million) inclusive of all interest during construction, transaction costs and a development fee. The project was developed and is being constructed by E.ON Climate & Renewables UK Limited.
Located 13 kilometres off the UK Sussex coast, at its nearest point, the project is backed by revenues from the UK's fixed price Renewable Obligation Certificates program and a 15-year power purchase agreement. Comprised of 116 Vestas V112-3.45 MW turbines, construction of the wind farm began in September 2015 and is expected to be fully operational in 2018.
Enbridge President and Chief Executive Officer Al Monaco stated:
"Offshore wind is a natural next step for Enbridge's significant wind business. We have a well-established renewables business and growing expertise in wind power technology, construction and operations and this project provides an attractive opportunity to partner with E.ON, an industry leading constructor and operator of offshore wind projects, and Green Investment Bank with its experience of supporting offshore wind ventures. Further developing our expertise in this business will position Enbridge to participate in future offshore developments."
"Our investment in Rampion Offshore Wind is a strong fit with our investor value proposition and advances a number of key corporate priorities. Rampion provides a timely and effective entry point to the European offshore wind business and it supports our objective of developing new platforms that extend and diversify our industry leading growth beyond 2019. The European offshore wind business comes with strong market fundamentals, sound commercial underpinnings and attractive returns. Once the project goes into service in 2018, we expect it to be immediately accretive to available cash flow from operations and earnings per share."
Under the terms of the agreement Enbridge will become one of three shareholders in Rampion Offshore Wind Limited which owns the project. The UK Green Investment Bank plc holds a 25 percent interest, and E.ON will retain the balance of 50.1 percent.
E.ON will manage construction of the project under a Construction Management Agreement. Rampion Offshore Wind Project is E.ON's tenth offshore wind project worldwide and its sixth in the UK. It will be operated by E.ON under a 25-year Management and Operations Management Agreement.
Enbridge's financial advisor for this transaction was Access Corporate Finance Partners LLP and its legal advisor was Dentons UKMEA LLP.