GIP’s Spanish ‘yieldco’ inks €186m Portuguese wind deal

Spanish ‘yieldco’ Saeta Yield has agreed a €186 million deal to buy a portfolio of nine wind farms in Portugal with a combined capacity of 144MW.

The vehicle, 24.4 percent owned by Global Infrastructure Partners’ $8.25 billion second fund, bought the assets from a subsidiary of Spain’s ACS, GIP’s partner in Saeta Yield. The deal represented an equity consideration of €104 million, with an enterprise value of €186 million. Saeta Yield said the portfolio’s relatively low leverage provides it with room to negotiate a refinancing.

The wind farms have been operational for an average length of about nine years and benefit from a 15-year feed-in-tariff with an additional seven-year cap-and-floor extension. Saeta Yield said the average regulatory life remaining in the projects is 12 years, although it expects to operate the farms beyond this.

The acquisition has been funded through the company’s €80 million revolving credit facility. Saeta Yield last week arranged a new €120 million facility with a syndicate of six Spanish and international banks, effective from the end of next month.

The deal is the latest agreed since it announced the purchase of two wind farms in Uruguay in January for a total of about €200 million. The assets represented the only place outside Spain in which it had invested until the transaction announced today. It is currently analysing opportunities in Mexico as part of a medium-term strategy to increase international assets’ revenues from the current 10 percent to almost 40 percent.

Following the new deal, Saeta Yield owns about 1.1GW of renewable energy assets which comprise 16 wind farms and five solar thermal plants in Spain, two wind projects in Uruguay and the nine-strong portfolio in Portugal.

Saeta Yield’s chairman José Luis Martínez Dalmau conceded at a recent shareholders’s meeting that the company’s performance has been rocked by volatility over the past couple of years. This was partially due to the “great effort required to explain the ‘yieldco’ concept” to European investors unfamiliar with the format. However, he added that its results since have boosted confidence in the business model.