​PenSam and PKA invest €100m in Texas wind farm

Two of Denmark’s largest labour-market pension funds, PenSam and PKA, announced they are investing DKK750m (€100m) in a Texas wind farm project.

The firm running the DKK2.4bn project, US-based renewable energy developer Longroad Energy, announced the financial close and start of construction of the El Campo wind farm in Knox County, Texas, calling it one of the largest investments ever made in the area.

Torsten Fels, PenSam chief executive, said: “Our US partner, Longroad Energy, is investing heavily in the development of renewable energy in the United States, where a significant shift away from fossil fuels and into a sustained direction is needed.”

The pension funds made the investment via AIP Management, which grew out of alternatives firm PKA AIP which was founded by PKA in 2012. In 2018, PKA AIP split to form AIP Management as an additional independent infrastructure investment platform, and the latter is now co-owned by both funds after PenSam became a partner last year.

PKA Chief Executive Peter Damgaard Jensen said: “I am pleased that we are now making the first big investment in AIP Management since PenSam bought and became part of the partnership. Together we can develop AIP and build on the success we have had in finding interesting investments.”

The funds said the wind farm in the US’s second-largest state will consist of 67 turbines, provided by the US subsidiary of Danish wind turbine manufacturer Vestas, supplying power equivalent to the consumption of 210,000 Danish households.

Damgaard Jensen said PKA had already invested DKK21bn in climate-related projects, primarily in Europe, in order to support the green transition and contribute to the Paris climate agreement.

“With the investment in El Campo, we are making our second major climate investment in the US, and we are thus helping to push the green transition in a country where so much is needed in terms of climate-friendly alternatives to fossil fuels,” he added.

PenSam said Vestas has agreed to a 25-year fixed-price operating and service agreement. It said two 15-year power purchase agreements had been signed for a total of 194 megawatts of energy of the park’s entire 243MW capacity, adding that the rest of the electricity would be sold on the commercial market.

Longroad Energy said that on the financing front, Berkshire Hathaway Energy was the sole tax equity investor, and the lending group was led by Keybank, and included HSBC, CIBC and Zions.

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