TRIG buys majority stake in Sweden wind farm, extends credit facility
By Josh White
Date: Thursday 20 Dec 2018
(Sharecast News) - The Renewables Infrastructure Group (TRIG) has exchanged contracts to acquire a 75% interest in Ersträsk Wind Farm - a 229.1MW onshore wind farm near Piteå in Northern Sweden - it announced on Thursday.
It said the project was being acquired from Enercon Independent Power Producer.
The FTSE 250 company said Ersträsk was currently under construction, and would comprise of 26 Enercon E-103 turbines of 2.35MW capacity each in the first phase, and 42 Enercon E-126 turbines of 4.0MW capacity each in the second phase.
It expected the first phase to become operational in the first quarter of 2019, with the second phase coming online in the first quarter of 2020.
Payment to the vendor for each of the two phases would be made only as each phase commenced operation, and was expected to be around €190m in total.
The investment would be financed by TRIG's revolving acquisition facility, with the board confirming the project had no third-party debt.
Renewables in Sweden received the benefit of a 15-year green certificate, the company explained, but the "substantial majority" of revenues came from power sales.
Ersträsk had already entered into hedging agreements for fixing power prices for the next two years for all of the first phase and a portion of the second phase expected generation, and intended to utilise hedges on an ongoing basis to manage exposure to power price variations.
TRIG had announced on 1 August that it was in advanced discussions to invest in the project.
The board said it had a strategy of diversifying risk by investing in multiple renewables and related technologies, jurisdictions and climate systems within its geographical focus of Northern Europe.
Ersträsk - the company's first investment in Sweden - provided further portfolio diversification of regulatory regimes, weather systems and power price markets, TRIG said.
The acquisition would increase its geographical diversification by taking its investments outside of the UK to 28% of the portfolio.
, Director, Infrastructure at InfraRed Capital Partners, said:
"Ersträsk is an important transaction for TRIG and its first investment in the Nordic region," said Richard Crawford, director at TRIG's investment adviser, InfraRed Capital Partners.
"This acquisition enables TRIG to further improve its geographical diversification and establish TRIG's presence in one of Europe's most attractive regions for renewable energy development.
"The investment fits nicely within the portfolio alongside TRIG's other acquisitions in 2018 in France, the UK and Ireland with their strong feed-in-tariff and contracts-for-difference support mechanisms."
In a separate announcement on Thursday, TRIG also said that it had secured an extension to, and an increase in, its committed revolving acquisition facility with its existing lenders - Royal Bank of Scotland International, National Australia Bank and ING Group - on improved terms.
The facility would now expire on 31 December 2021, with an option to extend it for a further 12 months, and the interest rate would be LIBOR - or EURIBOR as appropriate -plus 190 basis points, down from 205 basis points.
TRIG said the committed facility size had been extended to £340m from £240m.
The board said the changes had been negotiated to better facilitate the company with its acquisitions, and added that following the recent oversubscribed tap issue, the facility was currently undrawn.
"Given the scale of many renewables' projects now, particularly within onshore and offshore wind, including some of the projects we are evaluating for TRIG's portfolio, we are pleased to have extended TRIG's revolving acquisition facility, so TRIG is better able to access capital and execute on its pipeline," said Richard Crawford.
"The continued support of TRIG's existing banking group is evidence of the company's financial strength and its supportive relationships with lenders as well as the attraction of renewables as an asset class."
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN