This acquisition, TRIG’s first investment in an offshore wind project, was made for a total consideration of approximately £80 million (including transaction costs). The investment, giving TRIG an indirect equity interest in 14.7% of the Project, is in a new joint venture holding company alongside funds managed by Equitix Limited (representing 25.3% of the equity). The other equity partners in the Project comprise Statoil ASA (40%) and Green Investment Group, managed by Macquarie Group (20%).
The Project originally developed by Statoil, has an established operating history following its commissioning in 2012 and comprises 88 Siemens 3.6MW turbines. It earns revenues predominantly from the sale of Renewables Obligation Certificates, at a rate of 2.0 ROCs per MWh until 2032, and from wholesale power sales. The Project has long-term power purchase agreements in place. The Project further benefits from a long-term O&M contract with Statoil.
TRIG’s investment has been financed from a drawdown of the Group’s revolving acquisition facility (which is now approximately £106m drawn). The joint venture holding company has structured financing in place with term loans arranged by National Australia Bank and Goldman Sachs with a loan-to-value of approximately 63%. The loans are fully amortising within the subsidy period. The underlying wind farm has no additional leverage.
TRIG’s Investment Manager, InfraRed Capital Partners, and its Operations Manager, RES, are experienced in developing and investing in offshore wind in the UK and Continental Europe. The investment in Sheringham Shoal adds to the diversification of Company’s portfolio and will further enhance TRIG’s ability to source and execute additional investments in the expanding and maturing offshore wind market.
Helen Mahy CBE, Chairman of TRIG, said:
“The Board of TRIG is delighted to conclude the Company’s first investment in offshore wind, an industry in which the UK has built a leading global market share and which is expected to contribute a significant proportion of the UK’s renewable energy capacity build-out in the medium-term.
In the last few years TRIG and its Managers have evaluated several projects in the offshore wind sector, which has matured into a highly sought-after institutional investment category. TRIG’s partnership on Sheringham Shoal, alongside investors with significant experience in renewables and in broader energy markets, represents an ideal first step for TRIG in this space. The project is accretive to TRIG’s portfolio returns and has the higher 2.0 ROCs per MWh subsidy and a proven operating history.”