State buys back into former Bord Gáis assets
Two State-controlled entities, AIB and the Ireland Strategic Investment Fund (ISIF) have funded Greencoat Capital's acquisition of two Irish windfarms - just two years after the same projects were privatised as part of the sale of Bord Gáis Energy.
Greencoat Capital yesterday announced its takeover of the windfarms at Knockacummer, Co Cork and Killhills, in Co Tipperary, which have power generating capacity totalling 137 MW between them.
The wind farms were part of the Bord Gáis Energy portfolio sold by the State two years ago to meet targets set by the Troika. They were bought, as part of a larger portfolio of wind assets and projects in development by Canada's Brookfield Renewable Partners in a €700m deal. After the latest sale Brookfield still has more than 350MW of operating capacity in Ireland.
A unit of Greencoat already manages funds for the ESB, but the deal with Brookfield is its first managed investment in the Republic.
Greencoat said it intends to raise further long-term capital to build out a portfolio of energy assets in Ireland which will provide an income stream to investors.
Wind farms have become increasingly attractive to pension funds seeking higher yields in the current low-interest rate environment. The Bord Gáis portfolio bought for €700m comprised 321MW of operational assets, a further 100MW under construction and a development portfolio of potentially 300MW.
Brookfield invested in the portfolio to develop output after buying the assets, with market estimates suggesting the entire Irish business would now be valued at close to €1bn.
In 2014 Bord Gáis sold its energy division to a consortium of Centrica, Brookfield Renewable Energy Partners and Icon Infrastructure.
The sale prompted anger in some quarters, with opposition parties and trade unions accusing the Government of selling the company "on the cheap". The deal valued Bord Gáis Energy at €1.1bn, but the cash consideration was only a fraction of that.