Octopus Renewables Infrastructure Trust (ORIT) has entered into a conditional agreement to sell the 48MW Ljungbyholm wind farm in Sweden to a German institutional investor.
The €74m transaction is part of ORIT’s capital recycling programme and the price is in line with the company’s valuation of Ljungbyholm as of 31 March 2024.
It will realise an IRR of approximately 11% over the lifetime of ORIT’s investment, with the net proceeds expected to be used predominantly to repay part of ORIT’s short-term debt facility.
Completion of the transaction is subject, inter alia, to foreign direct investment approval by the Swedish Inspectorate for Strategic Products, which is expected later this year.
ORIT acquired the wind farm at pre-construction stage in March 2020, investing €68m in the project.
The investment manager, Octopus Energy Generation. managed the construction phase, bringing the wind farm into operation in June 2021.
The transaction follows the sale of two Polish wind assets in December 2023 and the divestment of an option over a Spanish solar project in January 2024.
Upon completion of the transaction, the capital recycling programme will have generated approximately £159m.
ORIT was advised on the transaction by Newsec Energy Transition.
ORIT chairman Phil Austin said: “We are pleased to enter this transaction, which is another key part of ORIT’s capital recycling programme.
“The agreed price further supports the company’s valuations, and once the transaction is completed it will enable us to reduce our short-term debt which, as we have previously communicated, is a key objective for us at this time.
“Ljungbyholm was the company’s first investment following ORIT’s IPO, and the exit further demonstrates our Investment Manager’s ability to manage the construction and operation of new renewable energy assets, which helps to drive the transition to net zero.”