The UK Green Investment Bank’s (GIB) offshore wind fund and global asset manager BlackRock have partnered to invest £423 million ($613 million; €548 million) in offshore and onshore wind farms generating a combined 220 megawatts (MW).
UK utility Centrica and energy investor EIG each had a 50 percent stake in GLID Wind Farms TopCo, a platform that manages the 194MW Lynn and Inner Dowsing offshore wind farm and the 26MW Glens of Foudland onshore wind farm, before the purchase. GIB’s commitment gives the green bank a 61 percent stake in the Lynn and Inner Dowsing wind farm, located off the north-east Lincolnshire coast, and BlackRock 31 percent. BlackRock also gained a 100 percent stake in the Glens of Foudland onshore wind farm in eastern Scotland.
Centrica said in a statement the sale is part of its strategy to “dispose of its interests in wind power generation, while continuing to purchase wind power”. The utility company will continue to purchase 100 percent of the power and 50 percent of the Renewable Obligation certificates from the wind farms under existing power purchase agreements until 2024. It will also provide operation maintenance for the GLID projects until March 2017.
For the Lynn and Inner Dowsing project, this is the first time in the UK non-utility investors will completely own an offshore wind farm.
GIB made its investment through its pioneering offshore wind fund, which had raised £818 million by late last year on its way to a £1 billion final close target. With this acquisition, its portfolio now consists of five assets generating 3,970 gigawatt-hours of energy every year.
Karl Smith, fund managing director for GIBFS, said the “unique partnership” between GIB and BlackRock “demonstrates the ability of the offshore wind fund to capitalise on opportunities” in the UK’s offshore wind sector.
“For investors, the sector can provide opportunities for less correlated, inflation-linked, long-duration income and attractive risk-adjusted returns,” added Rory O’Connor, a managing director at BlackRock.
More investments in European renewables seems likely in the near future for BlackRock. The asset manager announced it reached a €275 million first close on its Renewable Income Europe fund, which plans to raise €500 million. BlackRock also raised a £500 million fund in December 2014 specifically for renewable assets in the UK, the open-ended BlackRock Renewable Income UK fund.