More than £460m has been raised for the world’s first offshore wind fund to invest in UK wind projects.
The UK Green Investment Bank (GIB) said £463m of capital had been pledged by investors including pension funds and a sovereign wealth fund in the first stage of fundraising for a planned £1bn fund to inject money into offshore wind farms.
GIB is also investing £200m of its own money and said that with additional funds from other investors it expects to reach the £1bn target.
Shaun Kingsbury, GIB’s chief executive, said: “Offshore wind is playing an important role in the UK’s energy infrastructure. By 2020 we expect it to be providing enough clean, green energy to power the electricity needs of 8.2 million homes across the UK.
“A sector this size needs a broad range of long-term investment and those investors need products they can confidently, and commercially, invest in – like this fund.”
The GIB – managed by its subsidiary the UK Green Investment Bank Financial Services – has transferred its investments in two existing offshore wind farms into the fund, which gives immediate cash yield for investors.These are the 90MW wind farm in Rhyl Flats off the cost of North Wales, with 25 turbines, and Sheringham Shoal, an 88-turbine wind farm with a capacity of 317MW off the coast of Norfolk. The two are able to produce enough energy annually to power 305,000 UK homes.
The fund is the first raised by the GIB, but also the first move into asset management that allows it to manage private capital.
At the end of its financial year, the bank had pledged £723m to 22 green energy schemes, bringing the total number it has backed since it began operating in November 2012 to 46 projects with an overall value of almost £7bn.
“Attracting additional capital and creating a liquid market for operating assets is an important step in reducing the cost of offshore wind and supporting the continued growth of the sector,” Kingsbury said.
“New investors will allow the original developers to sell down their stakes and use the proceeds to finance new renewable energy projects.”
Provisional figures released by the Government this month showed that renewables such as solar, wind, bioenergy and hydro generated almost a fifth of the UK’s electricity in 2014, setting a new record for clean technologies, as E&T reported.