The UK-based specialist insurer of pension funds Pension Insurance Corporation (PIC) has invested GBP 115 million to provide debt-financing for the acquisition of a 50% share in the 659MW Walney Extension offshore wind farm.
At the beginning of November, Ørsted, the former DONG Energy, completed the divestment of its Walney Extension offshore wind farm to a consortium consisting of PKA and PFA, two Danish pension funds.
PIC took part of a GBP 1.3 billion senior secured project debt issuance due to mature in 2033. One of the tranches of the bond is additionally guaranteed by Denmark’s Export Credit Agency (EKF).
Although the corporation has previously invested in renewable energy including solar generation and biomass, this is its inaugural offshore wind transaction.
PIC believes that the investment provides a good match for its pension liabilities with predictable CPI-linked, secured and amortising cash-flows, including the revenues backed by the UK government’s Contract for Difference (CfD) regime, which provides fixed, CPI linked prices over the maturity of the debt.
Florence Carasse , Debt Origination Manager at PIC, said: “We are very pleased to have completed our first investment in the offshore wind industry with one of the most experienced and respected names in the industry. The Walney Extension Project will provide clean energy to a large number of UK homes while backing our pension payments for many years.”
Walney Extension, currently under construction , will become the world’s largest offshore wind farm once commissioned in the second half of 2018.