Amber Infrastructure (‘Amber’), is pleased to advise that Transmission Capital Partners, the consortium comprising Amber, International Public Partnerships Limited (‘INPP’), and Transmission Investment 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 Amber-advised funds’ 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 OFTO has 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').
INPP 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; 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; Returns that 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).