Danish fund manager Copenhagen Infrastructure Partners (CIP) has bought a 25 percent stake in a Scottish offshore wind farm project known as Beatrice. The seller was energy firm SSE, for an undisclosed price.
The acquisition was split equally between its two infrastructure funds, with each now owning a 12.5 percent stake in the project. Beatrice is one of five UK offshore wind projects to secure an Investment Contract from the government, providing a fixed inflation-indexed settlement price for a 15-year period. Its other shareholders are SSE (50 percent) and Repsol (25 percent).
Beatrice should be awarded a final investment decision in 2016 and be fully operational in 2019.
CIP senior partner Christina G. Sorensen told Infrastructure Investor’s sister publication Clean Energy Investor that Beatrice would be Fund II’s first investment. Sorensen explained the investment amount has yet to be finalised, as the project has not been approved, but hinted it might be substantial. According to her, that is one of the reasons why it is being split between CIP’s two funds: “This could be a big investment for us, so we wanted to share it with both our funds’ limited partners, for diversification purposes.”
In early October, CIP announced the official launch of its second fund with initial commitments of DKK 8 billion ($1.34 billion; €1.07 billion), as first reported by Clean Energy Investor. The fund launched backed by eight Danish institutional investors – DIP, JØP, Lægernes Pensionskasse, PBU, Nordea, Nykredit, PFA and PensionDanmark. The latter is by far the largest investor having committed DKK3.5 billion, or 44 percent, of the launch amount.
The 20-year buy-and-hold vehicle is open to investors until the end of the first quarter of 2015. It expects to hold a final close on between DKK10 billion and DKK12 billion, and be fully invested within three years. Fund II will focus on biomass-fired power plants, electricity transmission grids and onshore and offshore wind power across northern and western Europe, as well as North America.
CIP’s first fund should be fully invested by the end of this year. Unlike Fund II, CIP’s debut offering only manages money on behalf of PensionDanmark. Having started with a seed commitment of DKK6 billion, the fund now manages DKK10 billion for the Danish pension.
CIP is run by four partners, all ex-employees of Dong Energy: Jakob Baruel Poulsen, Rune Bro Roin, Torsten Lodberg Smed and Christian Skakkebaek. PensionDanmark itself has an existing relationship with Dong, having worked on several wind deals with the company in the past. Established in 1993, the €20 billion PensionDanmark manages labour market pensions on behalf of 640,000 public and private sector members.
This article was first published on Clean Energy Investor, Infrastructure Investor’s sister publication focused on low-carbon investment.