Legal & General has provided approximately GBP 300 million of long-term acquisition debt in support of Danish pension funds, PKA and PFA consortium’s GBP 2 billion purchase of 50% of Walney Extension from Ørsted (former Dong Energy).
The deal was financed by LGIM Real Assets on behalf of their clients, including Legal & General Retirement (LGR). LGR was the principal investor for LGIM Real Assets on this transaction, providing GBP 250 million of the circa GBP 300 million of long-term acquisition debt.
The acquisition represents Legal & General’s first debt investment into UK offshore wind sector.
Charles-Henry Lecointe , Senior Investment Manager, LGIM Real Assets, said: “We have a strong appetite for future investments into this sector as well as other renewable sectors, recognising the importance the offshore wind industry can have for providing clean energy and stimulating job growth in the UK.”
Kerrigan Procter , Chief Executive Officer, Legal & General Retirement, said: “It is a great investment fit for us as it enables us to fulfil pension promises to our customers in an efficient way, whilst playing a part in driving job creation and economic growth, which is good for business as well as our customers.”
The total price of approximately GBP 2 billion that PKA and PFA agreed to pay comprises the acquisition of a 50% ownership share and the commitment to fund 50% of the payments under the EPC contract for the entire wind farm, including the transmission assets. The acquisition price will be paid in 2017, and the EPC contract payments during 2017 and 2018.
Each of the new Walney Extension investors has obtained a 25% ownership interest in the wind farm, currently under construction and to be built by Ørsted under a full-scope EPC contract.