Sale of wind farm capacity
SSE has agreed to sell four wind farms1 with a total generation capacity of 79.5MW to a new fund managed by Greencoat Capital2, for a total cash consideration of £140m. SSE will invest up to £43m of the consideration into shares in the new fund. In the event that the fund is over subscribed, SSE's investment in the fund will reduce.
As part of the deal, SSE has agreed to enter into power purchase agreements (PPA) for three of the wind farms totaling 43.5MW (the fourth wind farm already has a PPA with a third party) and will continue to have the operation and maintenance contract for all four wind farms.
Following the completion of these disposals, SSE will have 1,351MW of onshore wind farm capacity in operation in GB and Ireland. It also currently has 277MW of new wind farm capacity that is in construction or pre-construction.
The sale of the wind farms is dependent on Greencoat Capital successfully listing on the London Stock Exchange and raising the required capital. It is expected that this process will be completed by the end of March, at which stage completion of the sale will also take place.
Gregor Alexander, Finance Director of SSE, said:
"This agreement represents the latest step in a programme of acquisitions and disposals to optimise our wind farm portfolio. Fundamentally, SSE owns generation capacity to meet the electricity needs of its own customers, which is why we were pleased to be able to establish new PPAs before disposing of these assets.
"The proceeds from these disposals will support our investment in new renewable assets in the coming financial year and, in line with our commitment to financial discipline, represent an excellent example of SSE creating ongoing value from its investment pipeline while improving the liquidity of the market for investment in new renewable developments."
Notes:
1. The wind farms included in the agreement are as follows:
Name |
Braes of Doune |
Carcant |
Tappaghan |
Bin Mountain |
Location |
Scotland |
Scotland |
Northern Ireland |
Northern Ireland |
MW's |
72 (SSE stake 36MW) |
6 |
28.5 |
9 |
SSE Share |
50% |
100% |
100% |
100% |
Operation Date |
July 2007 |
June 2010 |
19.5MW in Jan 2005 and 9MW in June 2009 |
July 2007 |
2. The new fund - Greencoat UK Wind plc - has today announced an Intention To Float (ITF) - www.greencoat-ukwind.com
As part of this ITF the fund has confirmed:
- that the seed portfolio will include operating assets from SSE and RWE and;
- that the Department for Business, Innovation and Skills has committed to subscribe for 50 million Ordinary Shares and;
- that SSE has committed to subscribe for up to 43 million Ordinary Shares.
