Octopus Renewables Infrastructure Trust (ORIT) is selling its Krzecin and Kuslin onshore wind farms in Poland, in a transaction that implies a 14-19% premium to the portfolio’s valuation.
The London-listed renewables firm said it had agreed to sell the 59MW wind farm portfolio to an affiliate of energy company Orlen and expects to receive around £90m (€104m) following the sale.
As part of the deal, Orlen has agreed to provide a loan to repay the existing bank debt secured against the wind farms.
ORIT expects to receive net proceeds of between PLN470m (€88m) and PLN490m, which Octopus said was above the wind farms’ mid-year valuation of £77m.
ORIT, which acquired the wind farms during construction in October 2021, said the sale was expected to realise an internal rate of return of 25-30%.
The sale forms part of ORIT’s announced strategy to release capital through the disposal of a small number of assets. ORIT said the proceeds will initially be used to repay short-term debt facilities and “may subsequently be reinvested in projects that offer further opportunities for capital growth and greater impact”.
Phil Austin, ORIT’s chairman, said: “The company has demonstrated its ability to manage the construction of these renewable energy projects, successfully delivering capital growth for investors, proving its ability to sell assets at an attractive valuation.
“As the company’s portfolio becomes increasingly weighted towards operational assets, selling some of these now and paying down short-term debt will then give ORIT the ability to explore new opportunities to build more green energy projects. This creates even greater scope for capital growth alongside ORIT’s income, and to continue making a difference by rapidly accelerating the green energy transition.”
To read the latest edition of the latest IPE Real Assets magazine click here.
