International Public Partnership Ld Financial Close on Dudgeon OFTO Project (6752G)
November 07 2018 - 9:49AM
UK Regulatory
TIDMINPP
RNS Number : 6752G
International Public Partnership Ld
07 November 2018
INPP reaches financial close on DudgEon Offshore Transmission
Project
7 November 2018
International Public Partnerships Limited, the listed
infrastructure investment company ("the Company", "INPP") has
announced that Transmission Capital Partners - the consortium
comprising INPP, Amber Infrastructure Group and Transmission
Investment ("the Consortium") - has successfully reached financial
close for the long-term ownership and operation of the transmission
link to the 402MW Dudgeon offshore wind farm (the "OFTO").
Located 32km off the coast of Cromer in North Norfolk, Dudgeon
OFTO transmits clean power to over 410,000 UK homes by generating
electricity using 67 6MW offshore wind turbines.
Dudgeon OFTO is the seventh UK offshore transmission project in
the Company's portfolio. In total, the Company's OFTO investments
transmit approximately 1.5GW of renewable electricity - or roughly
10 per cent of the UK's current installed and operational wind
capacity - to power the equivalent of over 1.5 million UK
homes.
In order to support the UK's clean energy transition, offshore
transmission remains a vital component in the supply chain to
connect offshore renewable power with the UK's electricity grid,
and since 2011, the Consortium has mobilised a total of c.GBP1
billion of long-term private sector network investment into
offshore transmission to support the UK's green economy.
The Company will make a c.GBP46 million investment for 100% of
the equity and subordinated debt in TC Dudgeon OFTO plc.
Approximately 85% of the Dudgeon offshore transmission assets
acquisition will be funded by way of a public bond issuance which
received a (P)Baa1 rating from Moody's.
The key investment highlights include:
-- An operational and immediately yielding asset with no
construction or refinancing risk - Dudgeon OFTO is currently
operational under the ownership of Equinor ASA, Masdar and China
Resources (Holdings) Co. Ltd., the owners of the wind farm to which
the OFTO is connected;
-- INPP will benefit from a 20-year availability-based revenue
stream with protected downside whereby maximum potential deductions
will be capped at 10% of base revenue in any year;
-- The operations of the OFTO assets will be subcontracted to
the wind farm owner to maintain (and repair) the assets at its own
cost and the wind farm owner will bear the risk if Ofgem's 98%
availability target is missed;
-- The returns generated from the Company's investment are
highly correlated to UK RPI and are not subject to any revenue or
penalty exposure to windfarm performance;
-- Revenues are contracted by a subsidiary of National Grid, the
National Grid Electricity Transmission plc (NGET) in their
statutory ring-fenced role as national electricity systems operator
(NGET rated 'A-' S&P; 'A' Fitch).
The investment has been funded with proceeds from the capital
raise the Company conducted in October 2018. With a cash balance of
c.GBP40 million available for further investments and its GBP400
million revolving credit facility currently undrawn, the Company is
well positioned to support its c.GBP200 million of nearer term
investment commitments, including further investment into Cadent
gas distribution.
Rupert Dorey, Chairman of International Public Partnerships
said: "As our seventh OFTO investment, the Company and its
consortium has played a pivotal role in the development of offshore
transmission into a low-risk, investible green technology. With the
commencement of the next round of Ofgem's competitive OFTO tenders,
we look forward to maintaining the balance that our stake in UK
electricity transmission brings to the Company's portfolio by
continuing to generate durable, low-risk and inflation-linked
returns for our investors. This investment is further evidence of
the Company's ability to continue originating an attractive
pipeline of investment opportunities with PPP-style
characteristics."
A copy of the Ofgem press release can be found at
https://www.ofgem.gov.uk/news-media/latest-news-press-releases.
ENDS.
For further information:
Erica Sibree/Amy Joslin +44 (0)20 7939 0558/0587
Amber Fund Management Limited
Hugh Jonathan +44 (0)20 7260 1263
Numis Securities
Ed Berry/Mitch Barltrop +44 (0) 20 3727 1046/1039
FTI Consulting
About International Public Partnerships (INPP):
International Public Partnerships ('INPP') is a listed
infrastructure investment company which invests in global public
infrastructure projects and businesses.
Listed in 2006, INPP is a long-term investor in 129
infrastructure projects and businesses, including schools,
hospitals, courts, police headquarters, transport and utility and
transmission projects in the UK, Europe, Australia and North
America. INPP seeks to provide its shareholders with both a
long-term yield and capital growth through investment across both
construction and operational phases typically of 25-40 year
concessions.
Amber Infrastructure Group ('Amber') is the Investment Adviser
to INPP and consists over 120 dedicated staff who manage, advise on
and originate investments for INPP.
Visit the INPP website at
www.internationalpublicpartnerships.com for more information.
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END
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