HICL Infrastructure (LON:HICL), the listed infrastructure investment company managed by InfraRed Capital Partners Limited, announced the completion of the acquisition of the transmission assets associated with the Race Bank Windfarm, located off the coast of Norfolk, by Diamond Transmission Partners, a consortium comprising HICL and Diamond Transmission Corporation Limited.
The transaction is part of Tender Round 5 of Ofgem’s Offshore Transmission Owner (“OFTO”) programme. HICL previously announced its status as preferred bidder for the OFTO, alongside Diamond Transmission Corporation Limited, in June 2018. The Group’s investment was £24m, funded from drawings under HICL’s Revolving Credit Facility.
Under the OFTO regime, DTP takes ownership of the operational transmission asset and receives contractual, availability-based revenues over a 20-year period. DTP does not have exposure to construction risk, electricity production or power price risk. Renewable Energy Systems will provide certain operations and maintenance services for DTP under a long-term subcontract.
This acquisition fits well with the HICL Infrastructure’s strategy of investing in essential and public core infrastructure, with a strong social purpose. The Race Bank OFTO facilitates the transmission of renewable energy to over 500,000 UK homes, contributing to the UK’s transition to a low-carbon economy.