International PPL - INPP Reaches Financial Close on Moray East OFTO
16/02/2024 07:00
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RNS Number : 3596D International Public Partnerships 16 February 2024
INPP REACHES FINANCIAL CLOSE ON MORAY EAST OFTO
16 February 2024
International Public Partnerships Limited, the listed infrastructure
investment company (the 'Company', 'INPP') has announced that Transmission
Capital Partners, the consortium comprising INPP, Amber Infrastructure Group
and Transmission Investment, has completed its acquisition of the Moray East
offshore transmission assets (the 'OFTO') which connects the onshore
electricity grid to the Moray East wind farm located in the Moray Firth off
the coast of Scotland.
The Moray East OFTO will be the Company's eleventh OFTO investment and has the
capacity to transmit enough renewable electricity to power the equivalent of
c.1.0 million homes, increasing the total equivalent across the Company's OFTO
portfolio to c.3.7 million homes.
At financial close, the OFTO will be granted a 23-year revenue period during
which it will have no exposure to electricity production or price but will be
paid an availability-based revenue stream linked to UK inflation (as measured
by the Retail Price Index).
The Company will make a c.£78 million investment for 100% of the equity and
subordinated debt in Moray East OFTO. Project level senior debt will be
provided by a group of banks, the tenor of which will match the maturity of
the 23-year revenue period such that there is no refinancing risk.
Other key investment highlights include:
· An operational and immediately yielding asset with no construction or
refinancing risk;
· INPP will benefit from an availability-based revenue stream with
protected downside whereby maximum potential deductions will be capped at 10%
of base revenue in any year;
· The returns generated from the Company's investment are highly
correlated to UK RPI and are not subject to any revenue or penalty exposure to
windfarm performance; and
· Revenues are contracted by a subsidiary of National Grid, the
National Grid Electricity System Operator (NGESO; rated Baa1 Moody's) in their
statutory ring-fenced role as electricity systems operator.
The investment has been financed with the proceeds of the c.£200m OFTO
investment realisation, announced in December 2023 1 (#_ftn1) . Following
the repayment of the Company's Corporate Debt Facility ('CDF') 2 (#_ftn2)
and funding of the recently announced £30 million share buyback programme,
c.£16 million cash remains available for further allocation.
Mike Gerrard, Chair of International Public Partnerships said: "We are proud
to report the acquisition of our eleventh OFTO. The Board has carefully
considered the merits of the Moray East investment and, as previously
announced, believes that the acquisition is favourable relative to alternative
capital allocation options. In addition, the acquisition builds on the
Company's contribution to a net zero carbon economy."
A copy of the Ofgem press release can be found
at https://www.ofgem.gov.uk/news-media/latest-news-press-releases
(https://www.ofgem.gov.uk/news-media/latest-news-press-releases) .
ENDS.
For further information:
Erica
Sibree
+44 (0) 7557
676 499
Amber Fund Management
Limited
Hugh
Jonathan
+44 (0)20 7260 1263
Numis Securities
Ed Berry/Mitch
Barltrop
+44 (0) 7703 330 199 / (0) 7807 296 032
FTI Consulting
About International Public Partnerships:
INPP is a listed infrastructure investment company that invests in global
public infrastructure projects and businesses, which meet societal and
environmental needs, both now, and into the future.
INPP is a responsible, long-term investor in over 140 infrastructure projects
and businesses. The portfolio consists of utility and transmission, transport,
education, health, justice and digital infrastructure projects and businesses,
in the UK, Europe, Australia, New Zealand and North America. INPP seeks to
provide its shareholders with both a long-term yield and capital growth.
Amber is the Investment Adviser to INPP and consists of approximately 180
staff who are responsible for the management and origination of infrastructure
investments.
1 (#_ftnref1)
https://www.internationalpublicpartnerships.com/media/press-releases/update-on-portfolio-optimisation-and-capital-allocation/
2 (#_ftnref2) At the time of this announcement, the Company's £350 million
CDF is undrawn with c.£17 million committed via letters of credit for
near-term pipeline investments, which includes the Gold Coast Light Rail 3 and
Flinders University projects.
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