Octopus Renewables Infrastructure Trust to sell Ljungbyholm wind farm for €74m

Octopus Renewables Infrastructure Trust plc (ORIT) has announced a conditional agreement to sell the Ljungbyholm onshore wind farm in Sweden to a German institutional investor for approximately €74 million. This transaction, part of ORIT’s capital recycling programme, aligns with the company’s valuation of the wind farm as of March 31, 2024, and is expected to yield an internal rate of return (IRR) of about 11% over the investment’s lifetime. The net proceeds from this sale will predominantly be used to repay part of ORIT’s short-term debt facility. The transaction’s completion is contingent on receiving foreign direct investment approval from the Swedish Inspectorate for Strategic Products, anticipated later this year.

ORIT acquired the 48 MW Ljungbyholm wind farm at the pre-construction stage in March 2020, investing approximately €68 million in the project. Octopus Energy Generation, the investment manager, successfully managed the construction phase, bringing the wind farm into operation in June 2021. This project marks ORIT’s initial investment post-IPO.

The sale of the Ljungbyholm wind farm is a significant component of ORIT’s capital recycling programme, following 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. Upon completing the Ljungbyholm transaction, ORIT’s capital recycling efforts will have generated approximately £159 million. Other projects are ongoing, with further updates expected in due course.

Phil Austin, Chairman of Octopus Renewables Infrastructure Trust plc, emphasized the strategic importance of the transaction, noting that the agreed price supports ORIT’s valuations. He highlighted that the transaction’s completion will help reduce the company’s short-term debt, a primary objective for ORIT. Austin also pointed out that the successful exit from Ljungbyholm demonstrates Octopus Energy Generation’s ability to manage the construction and operation of new renewable energy assets, which is crucial for advancing the transition to net zero.

ORIT received advisory services on the transaction from Newsec Energy Transition AB.

This transaction underscores the strategic approach of ORIT in managing its portfolio and recycling capital to optimize financial health and investment efficiency. By selling the Ljungbyholm wind farm, ORIT can effectively reduce its debt, improving its balance sheet and positioning the company for future investments in renewable energy projects. The successful management of the Ljungbyholm project from pre-construction to operation showcases the expertise of Octopus Energy Generation and reinforces the credibility of ORIT’s investment strategy.