Greencoat UK Wind PLC (LON:UKW) today announced that it has entered into an agreement to acquire the Douglas West wind farm from Blue Energy. Completion under the Sale and Purchase Agreement is expected to take place in Q1 2019, subject to the finalisation of construction, operation and maintenance contracts.
Douglas West is located 7 miles south west of Lanark, Scotland and will have a total capacity of 45MW, and will be subsidy free. Construction is expected to start in 2019, with commencement of commercial operations targeted for July 2021. Owner’s engineer and construction management services will be provided by Natural Power and Blue Energy. All construction contracts will be fixed price and include appropriate warranties and liquidated damages.
Acquisition and construction costs will total approximately £45 million over the period January 2019 to July 2021, which is expected to be funded through reinvestment of UKW’s excess cash flow. The acquisition of Douglas West follows the recent acquisition of the Tom nan Clach CFD project and will account for less than 3% of the portfolio by value, once operational and assuming no further acquisitions. Overall portfolio returns remain in line with UKW’s investment objective.
Tim Ingram, Chairman of UKW, commented: “We are pleased to have reached agreement to acquire Douglas West. Once operational, Douglas West will sit alongside our existing 32 ROC investments and, with Tom nan Clach also incorporated, will increase our generating capacity to 910MW as part of our balanced portfolio.”
Stephen Lilley of Greencoat Capital added: “During 2018 we have continued to build our portfolio with investments and commitments totalling over £500 million, of which approximately 70% are in ROC accredited wind farms. Although we are starting to see attractive CFD and subsidy free investment opportunities, we expect the majority of future investments will continue to be made from the £50 billion pool of UK wind farms accredited under the ROC regime.”