Financial Close on Beatrice OFTO

INPP reaches financial close on BEATRICE Offshore Transmission Project

29 July 2021

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 588MW Beatrice offshore wind farm (the 'OFTO'), Scotland's largest operational offshore wind farm.

The project relates to the transmission cable connection to the offshore wind farm located in the Outer Moray Firth, approximately 13.5km off the Caithness coastline in Scotland. The wind farm consists of 84 x 7MW wind turbine generators connected to two offshore substation platforms located within the boundaries of the Beatrice wind farm.

This investment will increase the Company's contribution to the UK's transition to a zero-carbon economy. The Beatrice OFTO will transmit green electricity equivalent to around 450,000 UK homes, increasing the number of homes that are powered via  the Company's OFTO portfolio to approximately 1.8 million homes.

The Company takes no exposure to electricity production or price risk but is paid a pre-agreed, availability-based revenue stream over 23 years which is fully linked to UK inflation ('RPI').

The Company will make a c.£50 million investment for 100% of the equity and subordinated debt in TC Beatrice OFTO Ltd. Project level senior debt will be provided by a range of banks and institutional investors to match the maturity of the OFTO such that there is no refinancing risk.

Other key investment highlights include:

·    An operational and immediately yielding asset with no construction or refinancing risk

·    INPP will benefit from a 23-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 and maintenance of the OFTO assets will be subcontracted to a set of specialist contractors incentivised to maximise availability of the transmission assets;

·    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; and

·    Revenues are contracted by a subsidiary of National Grid, the National Grid Electricity System Operator (NGESO rated Baa1 Moody's) in their statutory ring-fenced role as national electricity systems operator (NGESO).

The investment has been funded with proceeds from the capital raise the Company conducted in July 2021. With a cash balance of c.£95 million available for further investments and its £250 million revolving credit facility currently undrawn, the Company is also well positioned to support a further c.£50 million of nearer term investment commitments. In addition, the Company is preferred bidder on Rampion and East Anglia One OFTOs, which represent over £130 million.

Mike Gerrard, Chairman of International Public Partnerships said: "As our eighth OFTO investment, this transaction demonstrates INPP's leading position in this sector and demonstrates the Company's commitment to the UK's transition to net-zero. The long-term, inflation-linked revenue that this investment delivers is consistent with the Company's investment objectives and demonstrates its ability to continue originating a strong pipeline of investment opportunities." 

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 Edwards                                           +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):

INPP is a listed infrastructure investment company that invests in global public infrastructure projects and businesses, which meets societal and environmental needs, both now, and into the future.

INPP is a responsible, long-term investor in over 130 infrastructure projects and businesses. The portfolio consists of utility and transmission, transport, education, health, justice and digital infrastructure projects and businesses, in the UK, Europe, Australia and North America. INPP seeks to provide its shareholders with both a long-term yield and capital growth.

Amber Infrastructure Group ('Amber') is the Investment Adviser to INPP and consists of over 150 staff who are responsible for the management of, advice on and origination of infrastructure investments.