Listed infrastructure investor International Public Partnerships Limited (INPP) has announced that Transmission Capital Partners, the consortium comprising INPP, Amber Infrastructure and Transmission Investment has reached financial close for the long-term license and operation of its sixth UK offshore transmission project, Westermost Rough (OFTO).
INPP said it will make a £27 million investment for 100% of the equity and subordinated debt of the OFTO. The investment will be funded through cash raised by the company from its highly successful capital raising at the end of 2015, with the senior debt for the project of £155 million being jointly provided by the European Investment Bank and Aviva.
Ofgem has also announced it has granted the licence to Transmission Capital Partners to own and operate the £156.7 million high voltage link.
The OFTO will connect a windfarm containing 356MW turbines located 8km off the coast of Yorkshire to the onshore grid network, providing enough electricity to power around 150,000 UK homes.
The key investment highlights include:
An operational and immediately yielding asset with no construction or refinancing risk - Westermost Rough OFTO is currently operational under the ownership of DONG Energy A/S, Marubeni Corporation and the UK Green Investment Bank, the owners of the wind farm to which the OFTO is connected
20-year availability-based revenue stream with protected downside whereby potential deductions will be capped at 10% of base revenue in any year
Returns generated linked to UK RPI and are not subject to any revenue or penalty exposure to windfarm performance or credit
Revenues are contracted by a subsidiary of National Grid, the National Grid Electricity Transmission plc (NGET) in their statutory ring-fenced role as national electricity systems operator (NGET rated 'A-' S&P; 'A' Fitch)
Rupert Dorey, Chairman of International Public Partnerships said:
"Westermost Rough is the sixth OFTO in which INPP has invested, cementing the Company and its consortium's leading role in the offshore electricity transmission sector. It is a testament to our ability to source attractive investment opportunities such as these that reflects our favourable position in the UK infrastructure market. Where appropriate, we look forward to enhancing our portfolio's stake in UK electricity transmission, generating durable, low-risk and inflation-linked returns for our investors."