Scottish energy company SSE has entered into an agreement with Greencoat UK Wind to sell 49.9% stake in its two wind farms Stronelairg and Dunmaglass wind farms in a deal worth £635m.
As part of this deal, Greencoat UK Wind will acquire net 35.5% stake in the wind farms for £452m. The remaining 14.4% stake will be acquired by a pension fund, whose investment is managed by Greencoat Capital, for £183m. SSE will continue to own the remaining 50.1% stake in the wind farms.
Powered by 66 turbines, Stronelairg wind farm has a capacity of 228MW and is located near Fort Augustus, Scotland. The wind farm was commissioned in December 2018.
The other wind farm, Dunmaglass, is located 25km south of Inverness and has an installed capacity of 94MW, powered by 33 turbines. It was commissioned in December 2017.
The stake being sold equals to 160.6MW of capacity, with an average valuation for the two wind farms at around £4m per MW.
Owning the remaining stake of 50.1%, SSE will continue to operate the two wind farms following the completion of the transaction.
The company intends to use the proceeds from the transaction for share buyback and to reduce its debt.
Greencoat UK Wind chairman Tim Ingram said: “I am delighted to announce the acquisition of these two high load factor, ROC accredited wind farms, which will deliver attractive investment returns. This transaction builds on our longstanding relationship with SSE and we are delighted to be co-investing with a major UK pension fund partner.”
The transaction is expected to be completed on or before March 29, this year.
SSE Renewables managing director designate Jim Smith said: “We are delighted to partner again with Greencoat UK Wind with the sale of stakes in Stronelairg and Dunmaglass. The sale is in line with SSE’s strategy to create value from development and operation, as well as ownership, of assets.
“SSE Renewables is committed to driving the transition to a low carbon future, and through our efficient operation of onshore wind farms like these we will continue to help decarbonise the UK’s electricity generation mix.”
In December 2018, Greencoat UK acquired two Irish wind farms totaling 50.6MW, from Irish Infrastructure Fund for £87m. These wind farms include Church Hill and Crighshane wind farms.