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 400MW Rampion offshore wind farm (the ‘OFTO’).
The project will be the Company's ninth OFTO investment and relates to the transmission cable connection to the offshore wind farm located approximately 13km off the Sussex coast. The wind farm consists of 116 x 3.45MW wind turbine generators connected to an offshore substation platform (‘OSP’) located within the boundaries of the Rampion wind farm.
This investment will increase the Company's contribution to the UK's transition to a zero-carbon economy. The Rampion OFTO has the ability to transmit green electricity equivalent to around 350,000 UK homes, increasing the number of homes that could be powered via the Company's OFTO portfolio to approximately 2.1 million homes.
The Company takes no exposure to electricity production or price risk but is paid a pre-agreed, availability-based revenue stream over 20 years which is fully linked to UK inflation ('RPI').
The Company will make a c.£35 million investment for 100% of the equity and subordinated debt in TC Rampion OFTO Ltd. Project level senior debt will be provided by a group of banks to match the maturity of the OFTO revenue period 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 20-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 electricity systems operator (‘ESO’).
The investment has been funded through the Company’s £250 million revolving credit facility, which following the Rampion OFTO investment, will be £108 million net drawn. The Company notes that it is also preferred bidder on East Anglia One OFTO, with a committed investment of c.£90 million.
Mike Gerrard, Chair of International Public Partnerships said: “We are proud to report that our portfolio of OFTO investments, following the completion of our nineth OFTO, helps provide over two million UK households with clean energy helping the UK achieve net zero. In addition, the long-term, inflation-linked revenue that these investments deliver is consistent with the Company’s investment objectives and demonstrates its ability to continue originating a strong pipeline of investment.”
A copy of the Ofgem press release can be found at https://www.ofgem.gov.uk/news-media/latest-news-press-releases.
|Erica Sibree/Amy Edwards
T:+44 (0)20 7939 0558/0587
Amber Fund Management Limited
T: +44 (0)20 7260 1263
|Ed Berry/Mitch Barltrop
T: +44 (0)20 3727 1046/1039
About International Public Partnerships:
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.