Octopus Renewables Infrastructure (ORIT) has announced that it has purchased a further 7.75% ownership interest in the Lincs Offshore Wind Farm from a fund managed by Macquarie Asset Management. This follow-on investment adds to the original 7.75% stake in this wind farm that ORIT acquired in May 2022. Following this transaction, Lincs represents approximately 16% of ORIT’s portfolio on a gross asset value basis. In a separate transaction, ORIT has agreed to acquire the Leeskow Onshore Wind Farm from the German developer UKA. In connection with these acquisitions, a subsidiary of ORIT has entered into a £50 million debt facility with existing lender Natwest. The facility matures in November 2023 to align with ORIT’s existing revolving credit facility.
The Lincs Offshore Wind Farm
Located off the coast of Skegness, North of the wash off the East coast of England, the Lincs Offshore Wind Farm has been operational since 2013 and has long-term fixed price inflation linked revenue arising from the UK’s ROC (Renewables Obligation Certificate) regime, under which the wind farm receives 2 ROCs per megawatt hour of electricity generation during the first 20 years of operation. The wind farm has an installed capacity of 270MW, made up of 75 turbines each of 3.6 MW (spread across around 35 square kilometres) connected to an offshore substation (the offshore substation is then connected via 2 export cables to a grid connection point located at Warpole). The wind farm is operated and managed by Ørsted, the largest energy company in Denmark, and a leading developer and operator of offshore wind farms in the UK and globally. ORIT’s latest investment in Lincs comes alongside a co-investment from another fund managed by Octopus Energy Generation, Sky (ORI SCSp), which has acquired a 7.75% indirect stake in Lincs as part of this transaction. Following this transaction, funds managed by Macquarie Asset Management retain a 44% stake in Lincs. The site consists of 75 x 3.6MW wind turbines .
The Leeskow Onshore Wind Farm
The Leeskow Onshore Wind Farm is a 34.6MW operational wind farm located in Brandenburg, north-east Germany, that consists of seven Nordex N149 turbines, one of which was commissioned in August 2020, due to receiving its permit earlier than the remaining six which were commissioned in August and September of this year. Leeskow benefits from a government backed floor price for twenty years under the German EEG regime. The investment is not exposed to movements in or caps of wholesale power prices in the short to medium term. Leeskow has existing long term debt funding with fixed interest rates, and completion is expected to occur in Q4 2022 upon receipt of consent from the lenders for the change in ownership. Upon completion, Leeskow will represent approximately 8% of ORIT’s portfolio on a gross asset value1 basis.
Comments from Phil Austin, Chairman of Octopus Renewables Infrastructure
“Wind energy is a vital pillar of both the UK and the EU’s energy systems. Today’s investment in the Lincs Offshore Wind Farm takes ORIT’s position in this significant operational offshore wind farm asset to 15.5% and our commitment to Leeskow marks our first investment into German onshore wind.”
Comments from Chris Gaydon, Investment Director at Octopus Energy Generation
“These acquisitions of operational assets further increase the diversification in ORIT’s portfolio including adding a new country. Both assets add to the proportion of fixed-price power revenues in the portfolio, with the Leeskow acquisition based on power prices well below the cap recently announced by the EU.”