GIG ramps up development exposure with Swedish wind deals

The group targets earlier-stage projects after selling Europe’s largest onshore wind farm and ploughing €270 million into a new 235MW site in the same country.

The Green Investment Group has sold its share in Europe’s biggest onshore wind farm in Sweden, while ploughing a further €270 million into a new 235MW site in the same country.

The group, the specialist green energy principal investment arm of Macquarie, exited the 650MW Markbygden project to China General Nuclear Power Group’s European division just eight months after it closed an €800 million financing for the site alongside GE Energy Financial Services, which will retain a 25 percent stake.

GIG, meanwhile has closed a €270 million financing – €160 million of which in the form of debt – for the 235MW Överturingen project. As with Markbygden, the latest deal also benefits from a power-purchase agreement with Norwegian aluminium company Norsk Hydro. However, the newer structure is a 29-year contract, compared with 19 years for Markbygden, and is believed to be one of the longest in the world. Both projects are set to become operational by December 2019.

Ed Northam, head of GIG in Europe, denied the moves represented a change of strategy for the group and emphasised the importance of getting involved in an earlier development stage in a post-subsidy world.

“Taking on more development risk is an evolution of our model,” he told Infrastructure Investor. “That’s where we think we’re needed and can play a role.”

Northam said this role can be and has been crucial in helping primary developers bring wind farms to life, with Markbygden in the works for about 15 years before GIG’s investment, while Överturingen has also endured several years of permitting.

“We see the gap in the market in helping project developers get these projects off the ground,” he added.

GIG said it sees Scandinavia as a “priority market” following the two deals. The former Green Investment Bank also expanded into North America’s clean energy market last month, with the financial close of a 200MW wind project in Texas and the launch of a solar development partnership. Northam said the group, which Macquarie acquired from the UK government last year, is also focusing on its energy solutions business, providing commercial and industrial customers with distributed energy and energy- efficiency projects.