Aviva Investors is investing UK pension capital by providing infrastructure debt financing for the acquisition of offshore wind transmission assets.
Aviva Investors – which is making the investment on behalf of Aviva UK Life’s annuity business – said it has agreed to provide the infrastructure debt financing for the acquisition of offshore transmission assets at Hornsea 2 offshore wind farm in the UK by Diamond Transmission Partners.
Aviva Investors did not disclose the loan amount but said it has now provided around £1.7bn (€2bn) of financing towards renewable energy infrastructure projects, representing a total generation capacity of around 5.5GW.
The latest investment extends the global asset manager’s relationship with Diamond Transmission Partners, a joint venture comprising Diamond Transmission UK and HICL Infrastructure. The deal represents the third transaction where Aviva Investors has provided debt financing to Diamond Transmission Partners, having supported its purchases of offshore transmission operator (OFTO) assets at both Hornsea 1 and Galloper windfarms in 2021 and 2020 respectively.
Sinéad Walshe, director of infrastructure debt at Aviva Investors, said: “We are really pleased to get this investment over the line and to continue supporting investment into the UK’s offshore wind market. It is also great to extend our relationship with Diamond Transmission Partners, a market leader in the OFTO market.
”Hornsea 2 is a particularly attractive investment opportunity for UK Life as it provides long-term income streams which reflect its sustainability values and ambitions, whilst also delivering stable index-linked cashflows, making it particularly attractive in the current inflationary environment.”
Marcus Mollan, director of annuity asset origination at Aviva UK Life, said: “Well over a million homes are powered by the renewable energy from Hornsea 2 wind farm. Aviva’s annuity business is delighted to be financing this transaction, our most recent offshore wind investment.
”With investments like these, we are directing the premiums of our individual and bulk purchase annuity customers into long-term sustainable assets that will contribute to achieving both Aviva’s, and the UK’s, net zero ambitions.”
Hornsea 2, owned by Danish energy firm Ørsted, AXA IM Alts and Crédit Agricole, is located 89km from the Yorkshire coast and has a capacity of 1320MW.
In September last year, the Diamond Transmission Partners consortium which also includes Mitsubishi Corporation was appointed preferred bidder to own and operate the £1.2bn high voltage transmission connection link serving Hornsea 2 offshore UK wind farm.
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