SgurrEnergy advises on acquisition of the UK's largest wind farm portfolio

30 October 2007

Leading renewables specialist SgurrEnergy has advised investors Infracapital Partners LP, the European focused infrastructure fund of  Prudential M&G and a subsidiary of an investment entity advised by JPMorgan Asset Management, on the multi-million pound acquisition of the UK’s largest wind-farm portfolio.

SgurrEnergy’s experienced multi-disciplinary team performed vital technical due diligence on the £145million sale of a 33 per cent stake in Zephyr Investments Limited. At the time of the acquisition investment house Arcapita owned a third of the portfolio, with original developer RWE npower holding on to the remaining third.

The Zephyr portfolio represents almost 2O per cent of the UK’s total operational wind capacity and consists of 17 sites from Cornwall to Caithness, including the first major British offshore wind farm off the Welsh coast at North Hoyle.

Key focuses of the work included prediction of future energy outputs,assessment of operational performance of the wind farms, current and future operational and maintenance costs, de-commissioning costs, repowering costs and potential capacity increase resulting from repowering.  RBC Capital Markets acted as financial adviser.

Richard Boddington, wind analysis manager at SgurrEnergy, said the work represented a fascinating challenge for the consultancy.

He said: “The portfolio includes such a wide range of wind farms and turbine technologies, from some of the earliest UK projects such as Kirby Moor which was built in the early nineties, right through to larger UK projects such as North Hoyle offshore wind farm – which generates enough power to supply approximately 40,000 homes.

“The UK industry is still growing fast, but practical limitations such as grid connection and planning issues can slow it down.

“Since 2006 there has been a dramatic growth in the number of operational wind farms because many projects were stuck in planning stages until around 2005.

“With more than 8000MW in various stages of planning, wind power is no doubt one of the most prominent renewable forces, and this makes assets like Zephyr so sought-after as they are already operational.

“The due diligence assessment we carried out alongside financial advisers RBC Capital Markets enabled Prudential and JP Morgan to invest with confidence that all their requirements had been met at the highest level.”

Stephen Lilley, a Director in the Project and Infrastructure Finance team at Prudential M&G commented, "This investment represents a valuable strategic addition to our infrastructure portfolio and reflects the increasing maturity of this segment of the renewable energy market.  Renewable energy promises real growth potential and the opportunity to acquire an interest in such a high quality operational portfolio was too good a prospect to ignore."

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