Octopus Renewables Infrastructure Trust (ORIT) has entered into a conditional agreement to sell the Krzecin and Kuslin onshore wind farms in Poland, which have a combined capacity of 60MW, to an affiliate of Orlen.
The projects, located in the Provinces of Poznań and Szczecin, became operational in 2022.
One of them, Kuślin, was built in December 2022, with an estimated operational life of about 30 years.
The total installed capacity of the farm is about 40MW. Its infrastructure includes 12 Vestas turbines with a capacity of 2.4MW each.
The other site, Krzęcin, is located in the Province of Szczecin, near Choszczno.
Established in February 2022, it has an estimated life of 30 years. The project consists of eight Nordex turbines with a capacity of 3.3MW each, and its total installed capacity exceeds 19MW.
Once the acquisition is completed, Orlen will have an approximate total renewables capacity of almost 1GW.
Orlen’s chief executive and president Daniel Obajtek said: “We are effectively advancing towards strategic goals, which include having 9GW of installed renewable energy capacity by 2030.
“We consider and evaluate all attractive projects that appear on the market. As a result, our portfolio will soon be expanded to include two additional wind farms with a total capacity of about 60MW.
“These are modern units with great potential that will produce clean and affordable energy for the coming decades, to the benefit of the Poles and Poland’s economy, which is becoming more and more competitive thanks to our consistent investment in modern and clean energy sources.”
On completion of the transaction, ORIT expects to receive net proceeds, following the repayment of asset level debt and termination of hedging arrangements, of between PLN 470m and PLN 490m (equivalent to approximately £88m to £92m).
This represents a 14% to 19% premium over the holding value of the Krzecin and Kuslin wind farms of £77m as at 30 June 2023.
Completion of the transaction is expected to realise an IRR of 25% to 30% over the lifetime of ORIT’s investment.
The sale forms part of the company’s announced strategy to release capital through the sale of a small number of assets.
The proceeds will initially be used to repay short term debt facilities and may subsequently be reinvested in projects that offer further opportunities for capital growth and greater impact through building more new renewable energy projects like wind and solar farms.
Chairman of Octopus Renewables Infrastructure Trust Phil Austin said: “ORIT is committed to making a positive impact through investing in renewable assets which help accelerate the transition to net zero.
“Building new wind farms, like these two in Poland, has brought more vital green energy onto the system.
“The company has demonstrated its ability to manage the construction of these renewable energy projects, successfully delivering capital growth for investors, proving its ability to sell assets at an attractive valuation.
“As the company’s portfolio becomes increasingly weighted towards operational assets, selling some of these now and paying down short term debt will then give ORIT the ability to explore new opportunities to build more green energy projects.
“This creates even greater scope for capital growth alongside ORIT’s income, and to continue making a difference by rapidly accelerating the green energy transition.”