Octopus Renewables Infrastructure Trust (ORIT) has completed the sale of the Ljungbyholm onshore wind farm in Sweden to DWS Infrastruktur Europa, a DWS core infrastructure fund.
ORIT acquired the 48MW wind farm at pre-construction stage in March 2020, investing €68m in the project.
Octopus Energy Generation managed the construction phase, bringing the wind farm into operation in June 2021.
The sale price of €73.7m delivers an IRR of 11.3% over the lifetime of the company’s investment, ORIT said.
The proceeds represent a premium of £1.4m to the prevailing valuation of Ljungbyholm prior to agreeing the sale, of which £0.8m was incorporated into the Net Asset Value as at 30 June 2024.
The additional c.£0.6m is to be reflected in the 30 September 2024 Net Asset Value, which will be published in early November 2024.
The proceeds of the Transaction will predominantly be used to partially repay the Company’s short-term debt facility, following which short-term debt is expected to reduce to approximately £134m and total gearing is expected to fall from 46% as at 30 June 2024 to 43%.
The Transaction is part of the Company’s previously announced capital recycling programme, and follows the sale of two Polish onshore wind assets in December 2023, and the divestment of an option over a Spanish solar PV project in January 2024.
Post the Transaction, the capital recycling programme has to date generated gross proceeds of approximately £159m.
ORIT was advised on the Transaction by Newsec Energy Transition AB.
Phil Austin, chairman of Octopus Renewables Infrastructure Trust, said: “We are pleased to complete the latest phase of ORIT’s capital recycling programme, securing an attractive sale price at a premium to the asset’s holding value and which once again provides support to the Company’s valuations.
“The proceeds enable ORIT to repay a significant proportion of its short-term debt, which has been a key focus for the company.
“Completion of the sale also further demonstrates our Investment Manager’s ability to manage the construction and successful operation of renewable energy assets.”