TIDMINPP
RNS Number : 8872J
International Public Partnerships
16 December 2022
INPP REACHES FINANCIAL CLOSE ON EAST ANGLIA ONE OFTO
16 December 2022
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 ('the Consortium'), has successfully reached financial
close for the long-term ownership and ongoing operation of the East
Anglia One Offshore Transmission assets (the 'OFTO').
The project will be the Company's tenth OFTO investment and
relates to the transmission cable connection to the offshore wind
farm located approximately 50km off the coast of Suffolk. The wind
farm consists of 102 x 7MW wind turbine generators with an
installed capacity of 714MW connected to the offshore substation
platform ('OSP') located within the boundaries of the East Anglia
One wind farm.
This investment will further increase the Company's contribution
to the UK's transition to a net zero carbon economy. The East
Anglia One OFTO has the capacity to transmit enough renewable
electricity to power the equivalent of over 600,000 homes,
increasing the total equivalent across the Company's OFTO portfolio
to c.2.7 million homes.
The Company takes no exposure to electricity production or price
risk but is paid a pre-agreed, availability-based revenue stream
over 21.5 years which is linked to UK inflation (as measured by the
Retail Price Index ('RPI')).
The Company will make a c.GBP107 million investment for 100% of
the equity and subordinated debt in TC East Anglia OFTO Ltd.
Project level senior debt will be provided by a group of banks to
match the maturity of the OFTO 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 a 21.5-year availability-based revenue
stream with protected downside whereby maximum potential deductions
will be capped at 10% of base revenue in any year;
-- The operations and maintenance of the OFTO assets will be
subcontracted to a set of specialist contractors incentivised to
maximise availability of the transmission assets;
-- 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 ('ESO').
The investment has been funded using the remaining proceeds from
the Company's 2022 capital raise as well as its revolving credit
facility. Following the East Anglia One OFTO investment, the
Company's GBP250 million revolving credit facility will be c.GBP29
million drawn, with c.GBP17 million committed via letters of credit
for near-term pipeline investments. The Company notes that it is
also preferred bidder on Moray East OFTO, with an expected
investment of c.GBP100 million [1] .
Mike Gerrard, Chair of International Public Partnerships said :
"We are proud to report the completion of our tenth OFTO
investment. Our portfolio of OFTOs has the capacity to transmit
enough renewable electricity to power the equivalent of c.2.7
million homes, demonstrating the Company's contribution to
transition to a net zero carbon economy. In addition, the
long-term, inflation-linked revenue that these investments deliver
is consistent with the Company's investment objectives and
demonstrates its ability to continue originating a strong pipeline
of investment opportunities."
A copy of the Ofgem press release can be found at
https://www.ofgem.gov.uk/news-media/latest-news-press-releases
.
ENDS.
For further information:
Erica Sibree/Amy Edwards +44 (0) 7557 676 499 / (0) 7827 238
355
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
meets 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 and North America. INPP seeks to provide its shareholders
with both a long-term yield and capital growth.
Amber Infrastructure Group ('Amber') is the Investment Adviser
to INPP and consists of over 170 staff who are responsible for the
management of, advice on and origination of infrastructure
investments.
[1] The estimated investment amount has increased from the GBP75
million published in the Company's Interim Report due to the market
environment and fluctuating interest rates. Please note that
projected returns are not adversely affected.
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END
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