Greencoat Renewables begins buying spree with flurry of wind farm deals
Energy specialist Greencoat Renewables (Greencoat) has expanded its European portfolio of renewable assets with a flurry of fresh acquisitions.
It has waded into the German wind market snapping up 22.5 per cent of the Butendiek offshore development from investment group Marguerite Pantheon.
The wind farm is situated in Germany’s ‘exclusive economic zone’ in the North Sea and consists of 80 turbines that have been operational since 2015 – providing nearly 300 MW of power.
Analysts at Jefferies said the deal was a “material acquisition” for Greencoat and perhaps signalled the need to raise cash due to previously agreed deals.
“It also potentially signals an equity raise, as gearing would likely increase further as additional forward sale commitments complete during the year,” the investment bank’s wonks said in a note this morning.
The deal is subject to regulatory approval and is expected to close in the first quarter of 2023.
Following the acquisition of Butendiek, Greencoat’s total borrowings are set to stand at 47 per cent of gross asset value reflecting hefty outlays in recent months.
This includes its takeover of the 25MW Taghart wind farm in Ireland, its core market, which was also confirmed today alongside the 45MW Kokkoneva wind farm in Finland.
Both assets were purchased under a forward sale commitment.
Greencoat deals bolster renewable strategy
Greencoat invests in euro-denominated renewable energy infrastructure assets, and currently holds a portfolio with 1.14GW of generation capacity.
The company’s strategic focus is on the large secondary markets of continental Europe where it sees a significant opportunity to take on operating renewable energy generation assets.
It calculates there will be up to 400GW of European energy assets in the market by the end of the decade.
The company is managed by Schroders Greencoat, after Schroders acquired a 75 per cent stake in its former parent company Greencoat Capital in December 2021.
Commenting on the latest deals, Bertrand Gautier, investment manager said: “We are pleased to make this acquisition which consolidates Greencoat Renewables’ market position in the German offshore wind sector. This acquisition will also contribute to the diversification of Greencoat’s European portfolio whilst bringing further strong contracted cash flows.
“The acquisition of Butendiek demonstrates Greencoat Renewables’ commitment to the European offshore wind sector, which plays an increasing role in providing cost-competitive, decarbonated and reliable electricity. We believe the sector will continue to offer attractive investment opportunities in the near future.”
Shares in the London listed company were slightly up following the announcement, trading with a 0.88 per cent bump on the FTSE AIM 100 Index this morning.