INPP REACHES FINANCIAL CLOSE
ON MORAY EAST OFTO
16
February 2024
International Public Partnerships
Limited, the listed infrastructure investment company (the
'Company', 'INPP') has announced that Transmission Capital
Partners, the consortium comprising INPP, Amber Infrastructure
Group and Transmission Investment, has completed its acquisition of
the Moray East offshore transmission assets (the 'OFTO') which
connects the onshore electricity grid to the Moray East wind farm
located in the Moray Firth off the coast of Scotland.
The Moray East OFTO will be the
Company's eleventh OFTO investment and has the capacity to transmit
enough renewable electricity to power the equivalent of c.1.0
million homes, increasing the total equivalent across the Company's
OFTO portfolio to c.3.7 million homes.
At financial close, the OFTO will be
granted a 23-year revenue period during which it will have no
exposure to electricity production or price but will be paid an
availability-based revenue stream linked to UK inflation (as
measured by the Retail Price Index).
The Company will make a c.£78
million investment for 100% of the equity and subordinated debt in
Moray East OFTO. Project level senior debt will be provided
by a group of banks, the tenor of which will match the maturity of
the 23-year revenue period such that there is no refinancing
risk.
Other key investment highlights
include:
·
An operational and immediately yielding asset with
no construction or refinancing risk;
·
INPP will benefit from an availability-based
revenue stream with protected downside whereby maximum potential
deductions will be capped at 10% of base revenue in any
year;
·
The returns generated from the Company's
investment are highly correlated to UK RPI and are not subject to
any revenue or penalty exposure to windfarm performance;
and
·
Revenues are contracted by a subsidiary of
National Grid, the National Grid Electricity System Operator
(NGESO; rated Baa1 Moody's) in their statutory ring-fenced role as
electricity systems operator.
The investment has been financed
with the proceeds of the c.£200m OFTO investment realisation,
announced in December 2023[1].
Following the repayment of the Company's Corporate Debt
Facility ('CDF') [2] and
funding of the recently announced £30 million share buyback
programme, c.£16 million cash remains available for further
allocation.
Mike
Gerrard, Chair of International Public Partnerships
said: "We are proud to report the acquisition of our
eleventh OFTO. The Board has carefully considered the merits
of the Moray East investment and, as previously announced, believes
that the acquisition is favourable relative to alternative capital
allocation options. In addition, the acquisition builds on
the Company's contribution to a net zero carbon
economy."
A copy of the Ofgem press release
can be found at https://www.ofgem.gov.uk/news-media/latest-news-press-releases.
ENDS.
For further information:
Erica
Sibree
+44 (0) 7557 676 499
Amber Fund Management
Limited
Hugh
Jonathan
+44 (0)20 7260 1263
Numis Securities
Ed Berry/Mitch
Barltrop
+44 (0) 7703 330 199 / (0) 7807 296 032
FTI Consulting
About International Public Partnerships:
INPP is a listed infrastructure
investment company that invests in global public infrastructure
projects and businesses, which meet societal and environmental
needs, both now, and into the future.
INPP is a responsible, long-term
investor in over 140 infrastructure projects and businesses. The
portfolio consists of utility and transmission, transport,
education, health, justice and digital infrastructure projects and
businesses, in the UK, Europe, Australia, New Zealand and North
America. INPP seeks to provide its shareholders with both a
long-term yield and capital growth.
Amber is the Investment Adviser to
INPP and consists of approximately 180 staff who are responsible
for the management and origination of infrastructure
investments.