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INPP consortium closes third UK offshore project

The Transmission Capital Partners consortium, which includes London-listed investor INPP, has announced financial close on the £36.5m Barrow offshore transmission project. It’s the third transaction of its type that the consortium has closed so far this year.

Transmission Capital Partners has announced financial close on the £36.5 million (€41.9 million; $57.1 million), 90-megawatt Barrow offshore transmission project in the UK. The consortium comprises London-listed infrastructure investor International Public Partnerships Limited (INPP), its investment adviser Amber Infrastructure and transmission developer and adviser Transmission Capital. 

The transaction sees INPP invest 100 percent of the equity and subordinated debt, totalling approximately £8 million. Senior debt has been provided by Barclays, BNP Paribas and Lloyds. 

Barrow is an offshore wind farm located off the Cumbrian coast in the north-west of England. The asset comprises the onshore and offshore substations and under-sea cables connecting the wind farm with the mainland electricity grid network. The project has been operational since 2006. 

Features of the project include: 

– A revenue term of 18.5 years, with the potential for extension; 

– An availability-based revenue stream with protected downside (deductions capped at 10 percent of base fee in any year) and fully linked to the UK Retail Price Index; 

– No demand-based risk, with no exposure to wind farm performance or credit; and 

– Revenues guaranteed by National Grid Electricity Transmission, a subsidiary of the National Grid.

The project is part of a first-round auction of transmission links to nine offshore UK wind farms following a process run by Ofgem, the UK electricity regulator. Transmission Capital Partners was awarded four of these, and has already closed the Robin Rigg and Gunfleet Sands projects earlier this year. It has one remaining project scheduled to close by the end of the year. 

The consortium has also been shortlisted for a further three projects under Ofgem’s second round of tenders, due to be awarded in 2012. In total, new opportunities with a development value of up to £14 billion are expected to be tendered to the private sector during the next nine years.