In March GIB said it had reached first close on commitments of £463 million. The second close brings the total committed capital nearer to the bank’s target of £1 billion, and makes the fund the largest of its kind in the UK.
The second close has been marked with the acquisition by the fund of GIB’s option on a 10 per cent stake in the 576MW Gwynt y Môr offshore wind farm, located in Liverpool Bay, which was officially inaugurated in June of this year.
The fund now has three assets: 10 per cent in Gwynt y Môr, a 20 per cent stake in the 90MW Rhyl Flats windfarm off the coast of North Wales, and a 24.95 per cent interest in the 317MW Sheringham Shoal windfarm off the coast of Norfolk. These three offshore windfarms are able to produce 2,980GWh of renewable energy annually.
On completion of the Gwynt y Môr acquisition by the end of October, more than half of the fund’s capital will be invested in income-generating assets.
Second close investors included Swedish life insurance and pension company AMF Pensionsförsäkring AB and Strathclyde Pension Fund.
GIB chief executive Shaun Kingsbury said: “We created the offshore wind fund to provide investors like pension funds, insurance companies and other asset managers with access to a team of market-leading industry experts.
“This is a great way to put infrastructure money to work in the UK, the world’s leading market for offshore wind.”
Energy secretary Amber Rudd welcomed the private sector involvement in the fund, saying it “demonstrates how open for business and the best place in the world to invest in offshore wind”.
Chief executive of the Offshore Renewable Energy Catapult Andrew Jamieson hailed the second close of the fund as “excellent news” which “reinforces the UK’s primary role in the development of an offshore renewable energy industry that will be a huge economic boon to the UK’s economy in the decades to come”.
“The readiness of the international investment community – and the more risk averse pension funds in particular – to invest in the Green Investment Bank’s offshore wind fund is testament to industry’s concerted efforts to reduce risk and lower costs on the journey to parity with fossil fuel generation,” he said.