International Public Partnerships acquires Moray East OFTO to expand renewable portfolio
International Public Partnerships Limited (INPP), a prominent infrastructure investment company, along with its consortium partners Amber Infrastructure Group and Transmission Investment, collectively known as Transmission Capital Partners, has successfully completed the acquisition of the Moray East offshore transmission assets (OFTO). This strategic move connects the onshore electricity grid to the Moray East wind farm situated in the Moray Firth, off the coast of Scotland, marking INPP’s eleventh OFTO investment.
The Moray East OFTO is a pivotal investment for INPP, boasting the capacity to transmit enough renewable electricity to power approximately one million homes. This acquisition brings the total number of homes powered by INPP’s OFTO portfolio to an impressive 3.7 million. The OFTO will enjoy a 23-year revenue period, during which it will receive an availability-based revenue stream linked to UK inflation, measured by the Retail Price Index, eliminating exposure to electricity production or price fluctuations.
International Public Partnerships Limited Acquires Moray East OFTO, Enhancing Renewable Energy Infrastructure
INPP’s investment in the Moray East OFTO totals approximately £78 million, encompassing 100% of the equity and subordinated debt. The project is further bolstered by senior debt provided by a consortium of banks, with a tenure matching the 23-year revenue period, ensuring no refinancing risk. Key investment highlights include the asset’s operational status, yielding immediate returns without construction or refinancing risk, and a revenue stream that benefits from downside protection, with potential deductions capped at 10% of base revenue annually. Moreover, the investment offers returns highly correlated to UK RPI, with no direct revenue or penalty exposure linked to windfarm performance.
The acquisition is underpinned by a substantial financial strategy, utilizing proceeds from the c.£200m OFTO investment realization announced in December 2023. Following the repayment of the Company’s Corporate Debt Facility and the funding of a £30 million share buyback program, INPP has approximately £16 million in cash available for future allocations. Mike Gerrard, Chair of International Public Partnerships, expressed pride in the acquisition, emphasizing its alignment with the Company’s goal to contribute to a net zero carbon economy and its strategic value compared to alternative capital allocation options.