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Unique offshore wind fund breaks £1bn target

Dong Energy, offshore wind farm

The world’s first dedicated offshore wind fund has beaten its initial £1bn investment target with its sixth UK acquisition.

The Green Investment Bank (GIB) Offshore Wind Fund – which counts five UK local authority pension funds among investors – has investments worth £1.2bn after securing a 44% stake in the Lincs offshore wind farm, a 270MW farm with 75 3.5MW turbines.

The stake was bought from energy firm Centrica and Siemens Project Ventures for £429M. The fund’s investment was made alongside an investment from the UK GIB, which acquired a 31% stake in the project for £302M.

“Delivering the continuing growth of renewable energy is reliant on attracting new types of investors. In setting up an offshore wind fund GIB has created an innovative way to connect deep pools of long term capital to UK green infrastructure projects,” said GIB chief executive Shaun Kingsbury.

“In a short period of time we have successfully raised our first fund and fully invested its capital, passing our £1bn target.”

The fund’s investments have a combined capacity of 1.45GW, producing more than 4,500GWh renewable electricity each year and avoiding almost 2Mt of greenhouse gas emissions annually.

The news comes amid reports that the government is planning to sell its stake in the GIB. This has led to fears that the Bank will stop investing in wind energy.

“The GIB has helped to make offshore wind a high demand investment option for UK pension funds, which has been essential for the establishment of this successful industry,” said Green Alliance’s assistant director Dustin Benton.

“Recent concerns about a privatised GIB being asset stripped mean ministers can no longer guarantee that it will be able to do the same thing for future offshore wind or the next generation of low carbon technologies.”

The government stressed it has made clear its desire for the GIB to continue to invest in low carbon infrastructure following a sale.

“Any government decisions on the sale of the GIB will be driven by what best achieves our objectives, including continued investment in the green economy and a sale which is in the best interests of the taxpayer,” said a department for Business, Energy and Industrial Strategy spokesperson.

“This is a commercially sensitive process and it is inappropriate for us to comment further while that process is ongoing.”

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