Dromadda More Wind Farm acquired for €88.4m
Greencoat Renewables, which listed on the AIM segment of the London Stock Exchange on 25 July 2017, has announced that it has acquired the 36MW Dromadda More wind farm, from Impax Asset Management, for an all in cost of €88.4m. Dromadda More is Greencoat Renewables first acquisition since its IPO. It is located in County Kerry and its acquisition increases Greencoat Renewables generating capacity to 173MW (Greencoat Renewables was established with a seed portfolio of two wind farms with a capacity of 136.7 MW). The purchase of Dromadda More is being financed using the new €250m revolving credit facility discussed below.
Dromadda More wind farm consists of 11 “Vestas V112 turbines”. Greencoat Renewables says that Dromadda More is currently being energised and it expects the wind farm to be formally commissioned in March 2018 at which point the acquisition will complete.
Dromada More is a newly built asset. Greencoat Renewables say that, as such, it will benefit from a full 15 years of REFIT-2 revenues, guaranteeing a minimum floor price for the electricity produced by the asset. Greencoat Renewables also says that the acquisition will be subject to an adjustment mechanism, which will assess actual energy production over a twelve-month period, and the acquisition price will be adjusted accordingly. Paul O’Donnell, Partner at Greencoat Capital, describes Dromadda More as a high quality asset with a high load factor.
New €250m Revolving Credit Facility
Greencoat Renewables has announced that it has put in place a new €250 million revolving credit facility (RCF) with a syndicate of five domestic and international banks: AIB, BNP Paribas, Commerzbank, Royal Bank of Canada and Santander. The new RCF has three-year life and is to be used to re-finance existing project finance debt of €71 million and fund new acquisitions (including the purchase of Dromadda More discussed above). Greencoat Renewables intention to establish the RCF was set out at the time of its IPO.
Following the re-financing of the existing debt, and completion of the acquisition of Dromadda More, the RCF will provide capacity for a further €95 million of acquisitions. Bertrand Gautier, Partner at Greencoat Capital, says, “We are very pleased with the terms of the facility, and the acquisition flexibility that it will provide”.
About Greencoat Renewables
Greencoat Renewables describes itself as, “The Irish renewable infrastructure investment company”. It is an owner and operator of renewable infrastructure energy assets and is invested in wind farms in the Republic of Ireland. The company is listed on the ESM market of the Irish Stock Exchange and the AIM market of the London Stock Exchange – under the ticker GRP. It is managed by Greencoat Capital.
The company aims to provide a progressive dividend (6c on the issue price of €1.00), whilst preserving the portfolio’s capital value through reinvestment of excess cashflow and the prudent use of leverage.
Ireland has an EU obligation to ensure that 16 per cent of primary energy use is derived from renewable sources, expected to be largely from onshore wind, by 2020. Since 1995, Ireland has provided owners of operating wind farms with a supportive regulatory framework. Irish wind farms benefit from a 15 year inflation linked floor price under the REFIT regime, while allowing wind farms to capture prices above the floor.
Currently there is c.2.8GW of operating Irish wind farms with, the Company expects, a further 1.5GW expected to be built under REFIT2 by 2020, with significant consolidation opportunities. Over time, the Company aims to achieve diversification principally through investing in a growing portfolio of assets in certain other Eurozone countries in wind and/or solar PV.
GRP : Greencoat Renewables makes its first acquisition and announces a new €250m RCF