The UK Green Investment Bank has secured £463m (US$901 million) from a planned £1bn fund to invest in operating offshore wind farms in the UK.
The government-backed GIB said the £463m first close marks the completion of the first stage of fundraising and is triggered by the commitment of an initial group of investors. The initial investors comprise UK-based pension funds and major sovereign wealth funds. GIB is also investing £200m in the fund. GIB said it its FCA regulated subsidiary UK Green Investment Bank Financial Services expects to raise additional funds from other investors to reach the £1bn target.
In addition to the £463m of fund commitments raised, an additional significant amount of investor capital is available to co-invest into projects alongside the fund. The fund is dedicated to investments in offshore wind power generation and, once fully subscribed, will be the largest renewables fund in the UK. It will have an expected life of 25 years, allowing a new class of long-term investor to enter the sector.
This is the first fund raised by the GIB group and its first step into asset management. It is also the first private capital to be managed by the GIB group. It will be managed by a new FCA-regulated and authorised subsidiary called UK Green Investment Bank Financial Services Limited which is staffed by a dedicated team.
GIB has now transferred its investments in two operating assets into the fund, which will produce immediate cash yield for investors. They include the 90-megawatt Rhyl Flats wind farm operated by RWE Innogy UK off the coast of North Wales. It has been operational since December 2009. GIB has sold its full 24.95% equity stake in the project to the fund.
GIB has sold its full 20% equity stake in the 317-MW Sheringham Shoal wind farm off the coast of Norfolk operated by Statkraft since it started operating in October 2012