Munich Re buys HgCapital wind farms in first UK deal

The deal – which sees Munich Re acquire 102MW of wind power – represents a ‘significant realisation’ for HgCapital’s first renewables fund.

HgCapital has sold three operating wind farms to MEAG, the asset management arm of insurers Munich Re and ERGO, for an undisclosed sum, the private equity firm announced in a statement today. 

The wind farms sold have a combined capacity of 102 megawatts (MW). They include the 65MW Scout Moor wind farm near Manchester; north Wales’s 21.25MW Tir Mostyn farm; and Lincolnshire’s Bagmoor plant. Munich Re also bought and additional 50 percent of Scout Moor from Peel Energy, acquiring full ownership of the asset.

The wind farm portfolio was held by the HgCapital Renewable Power Partners fund, the firm's first renewable energy fund. To date, HgCapital's two renewable funds have invested over €550 million in equity in over 50 European Union renewable energy projects with a total investment volume in excess of €1.7 billion. 

The exit is in line with HgCapital’s renewable energy strategy to assemble platforms of high- quality, low-cost renewable energy projects at utility scale and create attractive assets for institutional investors, the firm explained in a statement. 

Tom Murley, head of HgCapital’s renewable energy team said: “The quality of the portfolio is evidenced by its average capacity factor of over 30 percent, well above the average UK onshore wind farms and it’s very high rates of operational availability.”

Munich Re is targeting a total investment of €2.5 billion in renewable-energy assets as part of its RENT (Renewable Energies and New Technologies) programme. The company has already invested more than €600 million around Europe.

Holger Kerzel, managing director of MEAG, said the company was “very pleased with this first investment in the UK,” adding it looks “forward to making more investments in the UK”. 

HgCapital bills itself as Europe’s leading dedicated renewable energy investor with more than €900 million in capital from over 30 global pension funds, insurance companies and other investors. 

Following the wind farms sale, it still holds a controlling interest in RidgeWind, a UK-based renewable energy development company.  Its portfolio includes 44MW of wind farms in construction, 34MW fully permitted and ready to start construction, and a pre-permitting pipeline in excess of 150MW.