Downing Renewables & Infrastructure Trust says it has entered into exclusive discussions in relation to the sale of its entire interest in Gabrielsberget wind farm in Sweden.

The offer price is at a small premium to the carrying value as at 30 June 2024 and the transaction is anticipated to complete in Q4 2024, turning about 14% of the NAV into cash.

DORE purchased Gabrielsberget in January 2022 for £19.8m. It has since delivered on a series of contractual and operational improvements, including most recently a five-year extension to the operating lease which resulted in a £4.4m valuation uplift. Altogether, these drove a roughly 50% uplift on the price that DORE paid.

In the manager’s view, now is the right time to capitalise on these value enhancements and the sale proceeds will be used to repay fully the revolving credit facility and to fund further growth and re-investment in the hydropower portfolio. This will include additions to the portfolio as well as supporting ongoing revenue optimisation projects. The sale of Gabrielsberget also makes additional capital available to continue DORE’s share buyback programme.

[This is a great result for the trust. Reinvesting the money in new projects should help drive further revenue and NAV improvement over the time. On a 32% discount, these shares are the wrong price.]

DORE : Downing Renewables will sell Swedish wind farm