Greencoat UK Wind PLC (UKW) has entered into an agreement to acquire 49.9% of Clyde Windfarm Limited from SSE for a consideration of £355 million (US$510 million), together with the infrastructure investment joint venture between Greater Manchester Pension Fund and London Pensions Fund Authority (GLIL).
UKW will acquire 28.2% of Clyde and GLIL will acquire 21.7% while SSE will continue to hold 50.1% of the shares.
Clyde Wind Farm is located in South Lanarkshire and consists of the Clyde North, Clyde South and Clyde Central wind farms, with a combined generating capacity of approximately 350 MW and a net load factor of 33.0%. Clyde North consists of 47 Siemens 2.3 MW turbines with a total capacity of 108 MW and is ROC accredited from August 2012. Clyde Central consists of 49 Siemens 2.3 MW turbines with a total capacity of 113 MW and is ROC accredited from January 2012. Clyde South consists of 56 Siemens 2.3 MW turbines with a total capacity of 129 MW and is ROC accredited from July 2011.
All were developed by SSE and receive 1 ROC per MWh. SSE will continue to operate the assets with Siemens providing turbine operation and maintenance.
The acquisition, which is expected to be completed on 18 March 2016, will be funded by a £165 million utilization under UKW's revolving credit facility, an increase of £25 million in UKW's fixed-rate loan with the Commonwealth Bank of Australia, £5 million from UKW's cash resources, plus Clyde cash balances. Following completion of the acquisition, at £325 million, UKW's total outstanding debt is expected to be approximately 38% of Gross Asset Value (leverage limit 40%).
SSE is in the process of constructing Clyde Extension, which will consist of 54 Siemens 3.2 MW turbines with a total capacity of approximately 173 MW. Once Clyde Extension is operational, UKW's and GLIL's shareholding in Clyde will be diluted (with an implied Clyde Extension value of £467 million subject to certain adjustments). Under the Shareholders' Agreement, UKW and GLIL have a Right of First Offer.
Tim Ingram, Chairman of UKW, commented:
"We are pleased to announce UKW's latest acquisition, which will deliver an attractive investment return, in line with the existing portfolio. We are delighted to extend our relationship with SSE and co-ownClyde, one of the largest onshore wind farms in the UK."
Laurence Fumagalli of Greencoat Capital added:
"There remains an exciting pipeline of future acquisition opportunities and we believe that our model positions us competitively in the market to acquire operational assets and makes us an attractive partner for utility vendors."
Paddy Dowdall, Assistant Executive Director, GMPF said:
"We are excited to be investing alongside Greencoat UK Wind and SSE in this venture. This investment offers us attractive returns, complements our growing renewable portfolio and continues our commitment to investing directly in British infrastructure."