Saturday 3 December 2016

Investors circle as break up of €1bn Irish wind portfolio begins

Canadian fund puts ex-Bord Gais wind assets up for sale

Gavin McLoughlin and Samantha McCaughren

Published 16/10/2016 | 02:30

'Wind farms have become increasingly attractive to pension funds seeking higher yields in the current low-interest rate environment.' (stock photo)
'Wind farms have become increasingly attractive to pension funds seeking higher yields in the current low-interest rate environment.' (stock photo)

A Canadian renewables fund that bought Bord Gais's wind farm assets two years ago, has initiated a process to sell off large parts of its Irish portfolio, which now carries an estimated value of €1bn.

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Brookfield Renewable Energy Partners paid around €700m on an enterprise value basis for the wind assets of Bord Gais Energy in 2014.

It is now selling part of the portfolio comprising two Munster wind farms generating a combined 137 megawatts, with 30 to 40 interested parties - including pension funds in Britain, Canada and Continental Europe - having received documentation relating to the sale, industry sources told the Sunday Independent.

Wind farms have become increasingly attractive to pension funds seeking higher yields in the current low-interest rate environment.

Brookfield declined to comment, but on a recent analysts' call its chief executive Sachin Shah called Ireland "one of the bright spots in Europe".

He said the company had "a responsibility to all of our investors to look to see if we can harvest some of that value that's accreted in the portfolio... in Ireland I'd say we continue to think about it and contemplate it but at this stage we're just considering it".

He signalled that any money realised from the sale of Irish assets would be reinvested in this country, saying that the company would look to realise value "so that we can find other opportunities in that marketplace to keep reinvesting our capital".

"If we can, we have a responsibility to our shareholders to recycle capital and continue to put it to work in new opportunities," he added.

Renewable industry publication Sparkspread reported that financial advisors Societe Generale and BNP Paribas have been appointed to the sale, dubbed Project Cape.

It reported that indicative bids are due this month, with binding offers due before the end of the year.

The wind farms Brookfield is looking to sell are the 100-megawatt Knockacummer farm in Cork, and the 37-megawatt Kill Hill wind farm in Tipperary.

The Bord Gais portfolio bought for €700m comprised 321 megawatts of operational assets, with a further 100 megawatts under construction and a development portfolio comprising as much as 300 megawatts.

It is understood that Brookfield has invested in the portfolio significantly since then, with market sources suggesting that the business would now be valued at close to €1bn. Canadian pension funds are expected to be strong contenders in the process.

Sunday Indo Business

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