Wednesday 25th June 2014


June 25, 2014

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UK green bank launches £1bn offshore fund

The UK’s Green Investment Bank is seeking to raise a £1bn fund to encourage private investment in offshore wind farms.

The government-backed bank is seeking long-term investors for a fund that would acquire equity stakes in operational UK offshore wind projects in the UK. The bank has so far invested more than £600m in five offshore wind farms, including Gwynt y Mor and Westermost Rough. In total, it has committed £1.3bn to green projects.

The Green Investment Bank was launched in November 2012 to boost private investment in the renewable energy sector. Today, it is revealing full details of its first set of annual results, for the year to 31 March 2014, at a meeting in London.

The bank revealed yesterday that it made an operating loss of £5.7m in the 2013/14 financial year, but this is because 88% of its investments are under construction. Shaun Kingsbury, chief executive of the bank, said it would reach sustained profitability once its portfolio is operational.

KKR pays €417m for one-third of Acciona arm

US private equity investor Kohlberg Kravis Roberts is to pay €417m for a one-third stake in Spanish energy company Acciona’s international renewable energy arm.

KKR is poised to buy the stake in Acciona Energia International, with the other two-thirds staying in Acciona ownership. The deal is due to complete in 2014. The partners plan to develop one of the world’s largest renewable energy portfolios.

AEI has operational renewable assets totalling 2.3GW, mostly wind farms, in 14 countries including the US, Mexico, Australia, Italy, Portugal and South Africa.

Serbian ministry revokes 145MW permit

Serbia’s construction ministry has revoked a building permit, which was granted by a regional authority, for a 145MW wind farm.

Continental Wind Serbia, a subsidiary of US developer Continental Wind, plans to develop the Cibuk wind farm near the town of Kovin. It had been granted a permit for the €300m project, but this has been revoked after an appeal by grid operator Elektromreze Srbije over the ownership of a transformer station.

These transformer stations cannot be owned by a wind farm developer. This dispute will increase uncertainty for projects in Serbia and make it tough for developers to secure loans.

NextEra in race for troubled Energy Future

US clean energy firm NextEra Energy is seeking to acquire a stake in Texas utility Energy Future Holdings, which filed for Chapter 11 bankruptcy protection in April.

Investors Kohlberg Kravis Roberts, TPG Capital and Goldman Sachs Capital Partners took Energy Future Holdings private in a $50bn private leveraged buyout in 2007, one of the largest in history. However, the business has struggled with debts and filed for Chapter 11 earlier this year.

NextEra has proposed a restructuring of Energy Future that involves a $2.2bn loan that could be converted into a majority ownership of the firm’s regulated power unit, Oncor. This has been rejected, and NextEra has since made an alternative proposal. Energy Future favours a $1.9bn plan by another group of investors.

NextEra operates 100 wind farms in 19 US states and Canada, which generate capacity of 10.2GW and make it the largest US producer of wind and solar energy.

Wisconsin Energy to pay $9.1bn for Integrys

US utility Wisconsin Energy Corporation has agreed to buy rival Integrys for $9.1bn, in a deal that would create the US state’s largest wind energy generator.

The combined entity would serve 4.3million gas and electric customers across the states of Wisconsin, Illinois, Michigan and Minnesota. While most of its energy comes from traditional sources, Wisconsin Energy owns wind generating capacity of 308MW; and Integrys subsidiary Wisconsin Public Service owns 108MW.

The deal is due to complete in summer 2015. It needs approval from shareholders at both firms, as well as public bodies including the Federal Energy Regulatory Commission. The new company would be called WEC Energy Group.

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