Renewables Infrastructure buys German offshore wind farm – The Renewables Infrastructure Group (TRIG) has exchanged contracts to acquire a c.36% equity interest in Merkur Offshore, a 396MW operational offshore wind farm located in the German North Sea.
TRIG has partnered for the acquisition with the Dutch pension investor APG, who will acquire the remaining c.64%. At, or shortly after the completion of the transaction (expected in H1 2020), TRIG will sell-down a share to minority co-investors managed by InfraRed (TRIG’s investment adviser), leaving TRIG with an approximate 25% equity interest in the wind farm. It should then be about 8% of TRIG’s portfolio.
The wind farm has 66 GE Haliade-150 6MW offshore wind turbines and GE Renewable Energy provides operations & maintenance services under a 10-year contract. Commercial operations commenced in June 2019 and the wind farm is subsidised by a Feed-in-Tariff for the next 13.5 years (until June 2033), followed by a minimum price for its power for a further 6 years. There is debt in the existing structure which is structured so that the project pays a fixed rate of interest and pays down all the debt gradually, over the period while the Feed-in-Tariff subsidies are being received.
TRIG’s investment will be financed from a combination of the proceeds of its recent capital raising and a drawdown from the revolving acquisition facility.
[TRIG has the resources to invest in these giant projects but still has to take relatively small stakes in them to avoid one project dominating the whole fund. This one is designed to provide enough power for 500,000 homes but the UK has just approved four projects that are each three times the size of this one – will TRIG be big enough in 2023 (when they start to produce electricity) to buy a quarter stake in one of these? – the picture shows activity from the construction phase of Merkur]
TRIG : Renewables Infrastructure buys German offshore wind farm