UK Green Investment Bank Financial Services raises UK’s largest renewables fund at second close

UK Green Investment Bank Financial Services Limited (GIBFS) has today announced that it has executed a Second Close on new commitments of £355m for the Offshore Wind Fund, bringing total committed capital to £818m and nearing its £1bn target. This makes the GIBFS-managed fund the largest renewable energy fund in the UK.

Second close investors include Swedish life insurance and pension company AMF Pensionsförsäkring AB (AMF) and Strathclyde Pension Fund. The Fund represents their first investments in the UK offshore wind sector. Second close investors join UK-based pension funds, a major sovereign wealth fund and UK Green Investment Bank plc (GIB) in the partnership, which held an initial close on £463m earlier this year.

The Fund is the first to be dedicated solely to investments in offshore wind power generation globally and provides long-term institutional investors with the opportunity to access the UK’s green infrastructure sector.

The second close has been marked with the acquisition by the fund of GIB’s option on a 10% stake in Gwynt y Môr offshore wind farm. The 576 MW wind farm – located in Liverpool Bay – was officially inaugurated in June of this year.

The Fund now has three assets. These three offshore wind farms are able to produce 2,980 GWh of renewable energy annually, enough to power more than 700,000 homes or all the homes in Northern Ireland.

On completion of the Gwynt y Môr acquisition, more than half of the Fund’s capital will be invested in income-generating assets.

Amber Rudd, Energy and Climate Change Secretary, said: “Offshore wind has been a UK success story and I welcome this long-term, private sector involvement in what is now the largest renewable energy fund in the UK. This demonstrates how we are open for business and the best place in the world to invest in offshore wind.”

Shaun Kingsbury, Executive Chairman of the Board, UK Green Investment Bank Financial Services Limited, and Chief Executive of the UK Green Investment Bank plc, said: “We created the OSW Fund to provide investors like pension funds, insurance companies and other asset managers with access to a team of market-leading industry experts. We are delighted to be working with investors of the calibre of AMF and Strathclyde Pension Fund, each of whom are leading the way in their recognition of the business value of investments in green infrastructure.  This is a great way to put infrastructure money to work in the UK, the world’s leading market for offshore wind.”

Karl Smith, Fund Managing Director, UK Green Investment Bank Financial Services Limited, said: “This second successful round of fundraising highlights the growing confidence that home-grown and international investors have in well-developed and well-managed offshore wind assets in the UK. We are in advanced discussions with other potential investors and progressing quickly towards final close and reaching our £1bn target.”

Peder Hassley, Chief Investment Officer, AMF, said: “AMF is responsible for managing the pensions of 4 million Swedes and is attracted to opportunities where responsible investments and good returns go hand-in-hand. We are very pleased to have committed to GIBFS’s Offshore Wind Fund as we strongly believe that investing in UK green infrastructure fulfils both requirements.”

Councillor Paul Rooney, Chair, Strathclyde Pension Fund, said: “This is our biggest investment to date in green infrastructure in the UK. Our fund was already working closely with the Green Investment Bank to provide finance for community-scale renewable energy projects and we are excited to follow that project by taking a stake in a long-term and globally significant investment in offshore wind power. We are confident it is one that will deliver not only sustainable and secure energy infrastructure for the future of our communities, but a sustainable and secure future for our members who are saving for retirement.”

Evercore Private Funds Group is acting as advisor and exclusive global placement agent for the fundraise and King & Wood Mallesons is acting a legal counsel to the fund.

Commenting on the intermediate close of the Green Investment Bank’s Offshore Wind Fund, Andrew Jamieson, CEO of the Offshore Renewable Energy Catapult, said: “This is excellent news that 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.”