GIB announced plans to launch a £1 billion (US$1.7 billion) fund to acquire equity stakes in operational offshore wind projects in the UK.
GIB is seeking a suitable group of strategic, long-term co-investors to participate in this innovative capital raising exercise. The fund will be managed by a GIB subsidiary which is currently regulated by the Financial Conduct Authority (FCA) and will be seeking permission from the FCA to become a regulated fund manager.
The UK’s offshore wind sector, with 3.6GW of installed capacity, 1.4GW in construction and a number of further projects in the pipeline, is set to grow significantly in the coming years.
Equity investments in operational wind farms can offer a compelling opportunity for investors seeking long-term, inflation-linked returns. These attributes can be well matched to the needs of long-term infrastructure investors such as sovereign wealth funds and pension funds.
In May 2014 GIB received State Aid approval from the European Commission to promote and manage funds and other co-investment structures for mobilising upfront private sector investment into its designated sectors.
This widening of GIB’s activities is a significant strategic development as it will enable GIB to promote and manage funds and all other types of structured co-investments within any of its designated green sectors, allowing it to raise and deploy private sector capital in addition to its current £3.8 billin of equity funding from the UK Government.
GIB is targeting a first close on the fund by the end of the calendar year.