The world’s first dedicated offshore wind fund1 - and Europe’s largest dedicated renewable energy fund - has today passed its initial £1bn target with its sixth UK asset acquisition.
Assets under management are now £1.12bn, exceeding the original target of £1bn.
Investors in the Fund include five UK local authority pension funds with approximately 700,000 members.
Lincs is the sixth and final investment by the Fund into operating offshore wind farms in the UK. The portfolio now has a total capacity of 1.45 GW.
The fund’s portfolio could help avoid almost 2 million tonnes of greenhouse gas emissions annually.
The Green Investment Bank Offshore Wind Fund and managed co-investment entities (the Fund) is managed by GIB Financial Services Limited (GIBFS or the Fund Manager) and is an FCA-regulated and wholly-owned subsidiary of the UK Green Investment Bank plc (GIB).
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 Fund Manager now has assets under management of £1.12bn.
Since its launch, the Fund has been successful in attracting new investors to offshore wind. Investors in the Fund include five UK local authority pension funds including Strathclyde Pension Fund. These pension funds collectively manage the pensions of approximately 700,000 UK citizens.
Other large investors in the Fund are Swedish life insurance and pension company, AMF Pensionsförsäkring AB (AMF), a major Middle Eastern sovereign wealth fund and UK Green Investment Bank plc.
The Fund’s most recent acquisition is a 44% stake in the Lincs offshore wind farm. The stake was bought from Centrica plc and Siemens Project Ventures for £429m. This investment was made alongside an investment from the UK Green Investment Bank plc which acquired a 31% stake in the project for £302m2.
Lincs is a 270 MW offshore wind farm, located 8km off the Lincolnshire Coast at Skegness, and is comprised of 75 Siemens 3.6 MW turbines. The wind farm has been operating since 2013. Centrica will continue to provide operations and maintenance support to the wind farm for a 12 month transitional period from completion of the transaction, following which DONG Energy will take over operations and maintenance support.
1 This refers to the “Fund” as defined below
2 The enterprise value of the GIB plc acquisition of a 31% share of the asset is £302m, this equates to a cash consideration of £282m.
A list of the Fund’s six investments is provided below. Collectively these projects have a capacity of 1.45GW producing over 4,500 GWh renewable electricity each year, resulting in the avoidance of almost 2 million tonnes of greenhouse gas emissions annually. The portfolio will also result in avoidance of emissions to air and consumption of fossil fuel. To mark the investment the Fund has published a Green Impact Report for the portfolio of assets.
Shaun Kingsbury, Chief Executive, GIB, and Chair, GIBFS, said:
Delivering the continuing growth of renewable energy is reliant on attracting new types of investors. In setting up an offshore wind fund GIB has created an innovative way to connect deep pools of long term capital to UK green infrastructure projects.
In a short period of time we have successfully raised our first fund and fully invested its capital, passing our £1bn target.
Bailie Philip Braat, Chair, Strathclyde Pension Fund, said:
Investing with the GIB was always going to be a good fit for Strathclyde Pension Fund. On the one hand you have one of the leading lights in the industry, and on the other you have one of the UK’s largest public sector pension funds. This was always going to be a great marriage that benefits both sectors, and it’s proving to be the case.
Karl Smith, Managing Director, GIB Offshore Wind Fund, said:
This is an attractive asset purchase in the current market and will likely be the final investment for the UK GIB Offshore Wind Fund. We are delighted to be entering into the Fund’s first partnership with DONG Energy. Lincs joins a portfolio of five other assets, producing returns consistent with those expected from the Fund investors.
Notes to editors
GIB Offshore Wind Fund investments
1. Lincs. A 270 MW, 75 turbine offshore wind farm located 8km off the Lincolnshire Coast. It has been operational since 2013. The Fund acquired a 44% stake in the wind farm in January 2017.
2. And 3. Lynn and Inner Dowsing (2 assets managed as a single project). A (combined) 194 MW, 54 turbine wind farm located off the coast of Lincolnshire. It has been operational since March 2009. The Fund acquired a 61% stake in the wind farms in February 2016.
4. Gwynt y Môr. A 576 MW, 160 turbine wind farm operated by 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. GIB sold its full 10% equity stake in the wind farm to the Fund in October 2016.
5. Rhyl Flats. A 90 MW, 25 turbine wind farm operated by innogy UK off the coast of North Wales. It has been operational since December 2009. GIB sold its full 24.95% equity stake in the wind farm to the Fund in April 2015.
6. 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 sold its full 20% equity stake in the wind farm to the Fund in April 2015.
About UK Green Investment Bank plc
UK Green Investment Bank plc (GIB) was launched in November 2012. With initial funding from the UK Government, it is the first bank of its kind in the world. It is a “for profit” bank, whose mission is to accelerate the UK’s transition to a greener economy, and to create an enduring institution, operating independently of Government.
GIB is wholly owned by HM Government. The Company is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. A wholly owned subsidiary UK Green Investment Bank Financial Services Limited, is authorised and regulated by the Financial Conduct Authority.