New record for renewables
Offshore wind fund now 80% towards £1bn total
The Green Investment Bank has attracted further capital for its offshore wind fund, taking it to more than 80% of its targeted sum.
Investors have committed £355 million in a second round, taking the sum so far raised to £818m, close to its £1 billion total. It is already the largest fund focused on renewable energy. The latest investors include Swedish life insurance and pension company AMF Pensionsförsäkring AB, and Strathclyde Pension Fund.
The OSW (Offshore Wind) Fund represents their first investments in the UK sector. These second close investors join first round UK-based pension funds and a major sovereign wealth fund – which Daily Business revealed earlier this year to be the Abu Dhabi Investment Authority.
The fund is the first to be dedicated solely to investments in offshore wind power generation globally and provides long-term institutional investors with the opportunity to access the UK’s green infrastructure sector.
This second close has been marked with the acquisition by the fund of GIB’s option on a 10% stake in Gwynt y Môr offshore wind farm. The 576 MW wind farm – located in Liverpool Bay – was officially inaugurated in June of this year.
There are now three assets in the fund. These three offshore wind farms are capable of producing 2,980 GWh of renewable energy annually, enough to power more than 700,000 homes or all the homes in Northern Ireland.
On completion of the Gwynt y Môr acquisition, more than half of the fund’s capital will be invested in income-generating assets.
Amber Rudd (pictured), UK Energy and Climate Change Secretary, said: “Offshore wind has been a UK success story and I welcome this long-term, private sector involvement in what is now the largest renewable energy fund in the UK. This demonstrates how we are open for business and the best place in the world to invest in offshore wind.”
Shaun Kingsbury (right), executive chairman of the board of Green Investment Bank Financial Services, and chief executive of the Edinburgh and London co-headquartered Green Investment Bank, said: “We created the OSW Fund to provide investors like pension funds, insurance companies and other asset managers with access to a team of market-leading industry experts.
“We are delighted to be working with investors of the calibre of AMF and Strathclyde Pension Fund, each of whom are leading the way in their recognition of the business value of investments in green infrastructure. This is a great way to put infrastructure money to work in the UK, the world’s leading market for offshore wind.”
Karl Smith, fund managing director, Green Investment Bank Financial Services, said: “This second successful round of fundraising highlights the growing confidence that home-grown and international investors have in well-developed and well-managed offshore wind assets in the UK.
“We are in advanced discussions with other potential investors and progressing quickly towards final close and reaching our £1bn target.”
Councillor Paul Rooney, chairman of Strathclyde Pension Fund, said: “This is our biggest investment to date in green infrastructure in the UK. Our fund was already working closely with the Green Investment Bank to provide finance for community-scale renewable energy projects and we are excited to follow that project by taking a stake in a long-term and globally significant investment in offshore wind power.
“We are confident it is one that will deliver not only sustainable and secure energy infrastructure for the future of our communities, but a sustainable and secure future for our members who are saving for retirement.”
Evercore private funds group is acting as advisor and exclusive global placement agent for the fundraise and King & Wood Mallesons is acting a legal counsel to the fund.