Aviva Investors boosts wind portfolio with $160m investment

The asset manager has acquired a 49% stake in two Scottish wind farms owned and operated by Fred Olsen Renewables.

Aviva Investors, the asset management arm of the UK insurer, has agreed to pay £117.3 million ($160.24 million; €133.14 million) for a 49 percent interest in two onshore wind farms, which have a total power generation capacity of 75.3MW.

Fred Olsen Renewables, a wholly owned subsidiary of Oslo-listed Bonheur ASA, will retain the majority stake in the portfolio which comprises Crystal Rig III (13.8MW) and Brockloch Rig Windfarm (61.5MW) and will continue to operate the projects, both of which are in Scotland.

According to a statement issued by Bonheur, CRIII and BRW derive part of their revenue from market-based power prices. In addition, the two wind farms also receive Renewables Obligation Certificates for their first 20 years of operation, which in the case of CRIII is until November 2036, while the ROC cut-off date for BRW is March 2037.

Under the terms of the agreement, Fred Olsen Renewables will acquire Aviva Investors’ minority interest for a nominal amount in 2042.

Aviva Investors is funding the acquisition, which it described as “one of the largest single acquisitions made by its infrastructure platform to date”, through its open-ended vehicle, Aviva Investors Infrastructure Income Fund.

The fund invests in a range of UK infrastructure sectors, with a particular focus on low-carbon energy and social infrastructure, Aviva Investors said in a separate statement, but did not provide further details. A spokeswoman for the firm had not responded to a request for comment at the time of publication.

However, in November 2016, the firm announced the acquisition of four UK wind farms with a total generating capacity of 60MW from renewables developer RES, through its infrastructure platform. A few months later, in July 2017, the firm made its first broadband allocation, investing £75 million through its open-ended fund in TrueSpeed, an ultra-fast, full-fibre broadband provider operating in rural communities in the south-west of England.

According to documents seen by Infrastructure Investor, last autumn, Aberdeen City Council’s pension board as well as the Hammersmith and Fulham pension fund were considering committing £100 million and £30 million respectively to Aviva Investor’s open-ended infrastructure vehicle.