Offshore wind

UK Green Investment Bank Financial Services raises UK’s largest renewables fund at second close

13 Oct 2015

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  • GIBFS’s Offshore Wind Fund now stands at £818m following a second close of £355m
  • Second close investors include Sweden’s AMF and Strathclyde Pension Fund
  • Fund has acquired the unconditional right to a 10% stake in the 576 MW Gwynt y Môr operating offshore wind farm

UK Green Investment Bank Financial Services Limited (GIBFS) has today announced that it has executed a Second Close on new commitments of £355m for the Offshore Wind Fund (the Fund), bringing total committed capital to £818m and nearing its £1bn target. This makes the GIBFS-managed fund the largest renewable energy fund in the UK.

Second close investors include Swedish life insurance and pension company AMF Pensionsförsäkring AB (AMF) and Strathclyde Pension Fund. The Fund represents their first investments in the UK offshore wind sector. Second close investors join UK-based pension funds, a major sovereign wealth fund and UK Green Investment Bank plc (GIB) in the partnership, which held an initial close on £463m earlier this year.

The Fund is the first in the world to be dedicated solely to investments in offshore wind power generation and provides long-term institutional investors with the opportunity to access the UK’s green infrastructure sector.

The second close has been marked with the acquisition by the fund of GIB’s option on a 10% stake in Gwynt y Môr offshore wind farm. The 576 MW wind farm – located in Liverpool Bay – was officially inaugurated in June of this year.

The Fund now has three assets (see notes). These three offshore wind farms are able to produce 2,980 GWh of renewable energy annually, enough to power more than 700,000 homes or all the homes in Northern Ireland.

On completion of the Gwynt y Môr acquisition, more than half of the Fund’s capital will be invested in income-generating assets.

Amber Rudd, Energy and Climate Change Secretary, said:

Offshore wind has been a UK success story and I welcome this long-term, private sector involvement in what is now the largest renewable energy fund in the UK. This demonstrates how we are open for business and the best place in the world to invest in offshore wind.

Shaun Kingsbury, Executive Chairman of the Board, UK Green Investment Bank Financial Services Limited, and Chief Executive of the UK Green Investment Bank plc, said:

We created the Offshore Wind Fund to provide investors like pension funds, insurance companies and other asset managers with access to a team of market-leading industry experts. We are delighted to be working with investors of the calibre of AMF and Strathclyde Pension Fund, each of whom are leading the way in their recognition of the business value of investments in green infrastructure.  This is a great way to put infrastructure money to work in the UK, the world’s leading market for offshore wind.

Karl Smith, Fund Managing Director, UK Green Investment Bank Financial Services Limited, said:

This second successful round of fundraising highlights the growing confidence that home-grown and international investors have in well-developed and well-managed offshore wind assets in the UK. We are in advanced discussions with other potential investors and progressing quickly towards final close and reaching our £1bn target.

Peder Hasslev, Chief Investment Officer, AMF, said:

AMF is responsible for managing the pensions of 4 million Swedes and is attracted to opportunities where responsible investments and good returns go hand-in-hand. We are very pleased to have committed to GIBFS’s Offshore Wind Fund as we strongly believe that investing in UK green infrastructure fulfils both requirements.

Councillor Paul Rooney, Chair, Strathclyde Pension Fund, said:

This is our biggest investment to date in green infrastructure in the UK. Our fund was already working closely with the Green Investment Bank to provide finance for community-scale renewable energy projects and we are excited to follow that project by taking a stake in a long-term and globally significant investment in offshore wind power. We are confident it is one that will deliver not only sustainable and secure energy infrastructure for the future of our communities, but a sustainable and secure future for our members who are saving for retirement.

Evercore Private Funds Group is acting as advisor and exclusive global placement agent for the fundraise and King & Wood Mallesons is acting a legal counsel to the fund.

Contacts

Ross Nisbet, Green Investment Bank: ross.nisbet@greeninvestmentbank.com / 0330 123 2153

Mikael Lindh Hök, AMF: mikael.lindh-hok@amf.se / +46 8 696 34 11

Colin MacKenzie, on behalf of Strathclyde Pension Fund: colin.mackenzie@glasgow.gov.uk / 0141 287 0930


Notes to editors

About UK Green Investment Bank Financial Services
UK Green Investment Bank Financial Services Limited is authorised and regulated by the Financial Conduct Authority. The company is a wholly owned subsidiary of UK Green Investment Bank plc, which is wholly owned by HM Government. UK Green Investment Bank plc is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority.

About AMF
AMF is a limited liability life insurance company that is owned equally by the Swedish Trade Union Confederation (LO) and the Confederation of Swedish Enterprise. The company is run according to mutual principles, entailing that AMF's profits accrue in their entirety to the customers. With approximately SEK 550 billion in assets managed for nearly 4 million customers, AMF is one of Sweden's leading pension companies and one of the largest owners on Nasdaq OMX Nordic Stockholm.

About Strathclyde Pension Fund
The £14bn Strathclyde Pension Fund is one of the UK’s largest, providing services to around 200,000 people across the public, private and third sectors. It is part of the Scottish Local Government Pension Scheme and is administered by Glasgow City Council.

Fund assets

Rhyl Flats. A 90 MW, 25 turbine wind farm operated by RWE Innogy UK off the coast of North Wales. It has been operational since December 2009. GIB has sold its full 24.95% equity stake in the project to the Fund.

Sheringham Shoal. A 317 MW, 88 turbine wind farm operated by Statkraft and located in the Greater Wash area off the coast of Norfolk. It has been operational since October 2012. GIB has sold its full 20% equity stake in the project to the Fund.

Gwynt y Môr. A 576 MW, 160 turbine wind farm operated by RWE Innogy UK located off the coast of North Wales. It is the second-largest operating offshore wind farm in the world and has been operational since June 2015. The Fund has acquired from GIB an unconditional right to acquire a 10% equity stake in the project. That transaction is expected to complete by the end of October.

Addendum: The Fund completed the acquisition of a 10% stake in Gwynt y Môr offshore wind farm on 30 October 2015.