Wind farm fund plans IPO after buying SSE sites

By ERIKKA ASKELAND
Published on 06/02/2013 19:58

ENERGY giant SSE is selling off a portfolio of wind farms to a UK government-backed infrastructure fund that will offer shares with an inflation-linked dividend.

Greencoat UK Wind aims to raise £205 million in an initial public offering (IPO) at the end of March, with the cash brought in from investors being used to buy four wind farms from SSE for £140m and a further two from RWE.

In turn, SSE will invest up to £43m in the stock market flotation of Greencoat, as well as signing up to a deal to buy the energy produced by the wind farms through a long-term power purchase agreement. The Department for Business, Innovation & Skills (BIS) will take a £50m stake.

Greencoat Capital, which is leading the flotation on the London Stock Exchange, believes the fund will be attractive to investors, with plans to provide a steady income via a 6p dividend, which will rise in line with inflation.

Stephen Lilley, a partner with Greencoat Capital, said the rate of return to investors has been designed to take into consideration the fluctuations in energy the wind farms produce.

The Greencoat fund will own 50 per cent of Stirling-based wind farm Braes of Doune, 25 per cent of Kent wind farm Little Cheyne Court, 100 per cent of the Tappaghan wind farm in County Fermanagh, and 25 per cent of Rhyl Flats off the coast of Wales. The UK Green Investment Bank is also acquiring a 25 per cent interest in Rhyl Flats.

If the fund raises £260m, it will take further stakes in wind farms through “exercisable call options”.