Further sale of a stake in Clyde Wind Farm to Greencoat and GLIL
SSE has signed an agreement to sell a further stake in Clyde Windfarm (Scotland) Limited ("Clyde")* to Greencoat UK Wind Plc (“UKW”) and GLIL Infrastructure LLP (“GLIL”).
In March 2016, SSE announced the initial sale of Clyde equating to 49.9% of the existing 349.6MW operational wind farm. At the time, it was highlighted that when the commercial operation (which will occur shortly) of the 172.8MW extension began, the equity stake in Clyde jointly owned by UKW and GLIL would be diluted to 30% with SSE retaining 70%.
Under the new agreement, on dilution, UKW and GLIL will acquire an additional 5% of Clyde, equating to 26.1MW, for a cash consideration of £67.8million, before costs, taking their share of the total Clyde development to 35%.
UKW and GLIL also have the option to buy a further 14.9% of Clyde, equating to 77.8MW, for a cash consideration of £202.2 million, before costs. This option can be exercised between 1 April 2018 and 30 June 2018.
If this option were to be exercised, SSE’s share in Clyde would reduce to 50.1% with UKW and GLIL owning the remaining 49.9%.
This transaction implies a combined valuation of the two wind farms of £2.6million per MW.
The Clyde windfarm is located in South Lanarkshire and the original wind farm has a combined generating capacity of 349.6 MW from 152 Siemens 2.3MW turbines. The Clyde Extension consists of 54 Siemens 3.2 MW turbines with a total capacity of 172.8 MW and SSE believes it is one of the most efficient large wind farms in Great Britain.
Martin Pibworth, SSE’s Managing Director Wholesale, said:
“Both the original Clyde wind farm and the recent extension are complex projects, requiring major investment and a great deal of effort to deliver such efficient assets that make a huge contribution to supplying electricity and reducing carbon emissions across the GB market. The sale of a further stake in Clyde to UKW and GLIL is a natural step in our partnership with them and our commitment to recycle capital where we can see value for SSE.”
In line with both SSE and government policy, Clyde Extension wind farm will deliver community benefit equivalent to £5,000 per MW per year, index-linked on an annual basis. SSE has engaged with community councils and local authority representatives in each of the three benefit areas and the package of funds has been accepted by the community. All funds will be open to not-for-profit community groups only and will follow SSE’s standard fund eligibility criteria. Today’s announcement does not impact on how the funds will be administered.
* Clyde Windfarm (Scotland) Limited is the entity that holds the assets of the original 349.6MW Clyde windfarm and the 172.8MW Clyde Extension Windfarm.