The Green Investment Bank Offshore Wind Fund said it exceeded its initial £1 billion target with its sixth UK asset acquisition — a 44% stake in the Lincs offshore wind farm bought from Centrica and Siemens Project Ventures for £429 million.
Lincs is a 270 MW offshore wind farm 8km off the Lincolnshire Coast at Skegness, and is comprised of 75 Siemens 3.6 MW turbines.
The Offshore Wind Fund’s deal was done alongside an investment from its parent, Edinburgh-based UK Green Investment Bank, which acquired a 31% stake in the Lincs project for £302 million.
Investors in the Offshore Wind Fund include five UK local authority pension funds including Strathclyde Pension Fund.
The local authority funds collectively manage the pensions of 700,000 UK citizens.
The GIB Offshore Wind Fund said it now has assets under management of £1.12 billion.
It is the world’s first dedicated offshore wind fund — and Europe’s largest dedicated renewable energy fund.
Other large investors in the Offshore Wind Fund are Swedish life insurance and pension company AMF Pensionsförsäkring AB (AMF), a Middle Eastern sovereign wealth fund and UK Green Investment Bank plc.
The Lincs wind farm has been operating since 2013.
Centrica will continue to provide operations and maintenance support to the wind farm for a 12 month transitional period once the deal is closed, following which DONG Energy will take over operations and maintenance support.
DONG Energy continues to hold a 25% share in the Lincs asset.
Philip Braat, chair of Strathclyde Pension Fund, said: “Investing with the GIB was always going to be a good fit for Strathclyde Pension Fund.
“On the one hand you have one of the leading lights in the industry, and on the other you have one of the UK’s largest public sector pension funds.
“This was always going to be a great marriage that benefits both sectors, and it’s proving to be the case.”
GIB CEO Shaun Kingsbury said: “Delivering the continuing growth of renewable energy is reliant on attracting new types of investors.
“In setting up an offshore wind fund GIB has created an innovative way to connect deep pools of long term capital to UK green infrastructure projects.
“In a short period of time we have successfully raised our first fund and fully invested its capital, passing our £1 billion target.”
GIB Offshore Wind Fund managing director Karl Smith said: “This is an attractive asset purchase in the current market and will likely be the final investment for the UK GIB Offshore Wind Fund.
“We are delighted to be entering into the Fund’s first partnership with DONG Energy.
“Lincs joins a portfolio of five other assets, producing returns consistent with those expected from the Fund investors.”