Greencoat UK Wind and an unnamed UK pension fund have agreed to buy a 49.9% stake in two Scottish wind farms owned by energy firm SSE for £635m (€724.3m).
Greencoat UK Wind said it will buy a 35.5% stake in the Stronelairg and Dunmaglass wind farms and the Greencoat Capital managed account will buy a 14.4% for £452m and £183m respectively. The stakes equate to 160.6MW of capacity.
SSE said it will continue to hold the remaining 50.1% and will continue to operate both assets while future development rights are in line with equity share.
The Stronelairg wind farm with 66 turbines was commissioned in December last year. Dunmaglass is a 33 turbine wind farm and was commissioned in December 2017.
Greencoat UK Wind said it intends to raise up to £131m by selling shares to institutions at 127p each to help reduce future draw downs under the company’s credit facility.
Tim Ingram, the chairman of Greencoat UK Wind, said: “This transaction builds on our long-standing relationship with SSE and we are delighted to be co-investing with a major UK pension fund partner.”
Laurence Fumagalli of Greencoat Capital, said: “We are pleased to add two more large wind farm investments to our portfolio, located close to our existing capacity in the Highlands.
“We continue to see a strong pipeline of acquisition opportunities, and our independence and our proven track record in execution and operations makes us an attractive partner for utility vendors looking to recycle capital.”
Jim Smith, a managing director designate at SSE Renewables, said: “We are delighted to partner again with Greencoat UK Wind with the sale of stakes in Stronelairg and Dunmaglass.”
Smith said the sale is in line with SSE’s strategy to create value from development and operation, as well as ownership, of assets.
“SSE Renewables is committed to driving the transition to a low carbon future, and through our efficient operation of onshore wind farms like these we will continue to help decarbonise the UK’s electricity generation mix.”
The transaction is expected to complete by the end of March.