Star Capital sells ElecLink Interconnector

The London-based private equity firm has exited its 51% stake in the project to joint venture partner Groupe Eurotunnel for €75m.

After launching ElecLink Interconnector as a joint venture with Groupe Eurotunnel in 2011, Star Capital has sold its 51 percent stake in the trans-Channel cable to its fellow shareholder for €75 million.

“Today ElecLink has all the regulatory permissions required to build, own and operate a privately funded 1000MW high voltage CD electrical interconnector connecting the UK and France through the Channel Tunnel,” the London-based private equity firm said in a statement.

The project, which has gained the status of a Project of Common Interest by the EU, has also secured grid connections and has “highly credible” engineering procurement construction counterparties in place to build the link.

ElecLink will soon progress to a capacity auction and financing, according to the statement. Because the 51km cable will run inside the Channel Tunnel, the environmental impact of the project is minimal, Star Capital said, adding that ElecLink would allow for a reduction in carbon emissions of around 6.1 million tonnes.

“This transaction will provide a return of over 6x and an IRR of 114 percent, a result consistent with the excellent returns that the Star funds have delivered for investors,” Star Capital chairman Tony Mallin said. 

The firm made the investment in ElecLink through Star II, a vehicle it closed on $581 million in 2010.