Octopus Renewables Infrastructure Trust (ORIT) is selling its Ljungbyholm wind farm in Sweden for around €74m as part of an ongoing capital-recycling programme.
ORIT said the 48MW Ljungbyholm wind farm is being acquired by a German institutional investor at a price in line with the company’s 31 March 2024 valuation.
The sale is expected to generate an internal rate of return of around 11% over ORIT’s investment period which started in 2020.
ORIT invested €68m in March 2020 to acquire the Ljungbyholm wind farm at a pre-construction stage. ORIT’s investment manager, Octopus Energy Generation managed the construction phase, bringing the wind farm into operation in June 2021.
The London-listed fund said the latest divestment is part of its capital-recycling programme, adding that once the deal is completed, the programme will have generated approximately £159m (€189m).
“Other capital recycling projects are in progress and the company will provide further updates when appropriate,” ORIT said.
ORIT said the net proceeds from the sale of the asset are expected to be used predominantly to repay part of ORIT’s short-term debt facility.
Phil Austin, chairman of ORIT, said: “We are pleased to enter this transaction, which is another key part of ORIT’s capital-recycling programme. The agreed price further supports the company’s valuations, and once the transaction is completed it will enable us to reduce our short-term debt which, as we have previously communicated, is a key objective for us at this time.
“Ljungbyholm was the company’s first investment following ORIT’s IPO, and the exit further demonstrates our Investment manager’s ability to manage the construction and operation of new renewable-energy assets, which helps to drive the transition to net zero.”
To read the latest IPE Real Assets magazine click here.
