Legal & General has provided £300m in long-term debt to help Danish pension funds, PKA and PFA consortium acquire 50% stake in the 659MW Walney 3 offshore wind farm from Orsted, formerly DONG Energy.
As an anchor investor, LGIM Real Assets has structured commercial debt and export credit agency wrapped debt on the transaction.
The acquisition marks Legal & General’s first debt investment into UK offshore wind sector and its second largest infrastructure debt investment, following the £400m London Gateway Port refinancing in 2016.
LGIM Real Assets senior investment manager Charles-Henry Lecointe said: “This deal represents our first offshore wind investment for LGIM clients.
“We have a strong appetite for future investments into this sector as well as other renewable sectors, recognizing the importance the offshore wind industry can have for providing clean energy and stimulating job growth in the UK.
“Legal & General continues to be committed to investing in key UK infrastructure assets which will have a major impact on stimulating economic growth while ensuring long-term cash flow for pension funds.”
Planned to be built in the Irish Sea, around 19km west of the Walney Island coast in Cumbria, the Walney Extension offshore wind farm will be equipped with 87 wind turbines.
The project will be able to generate enough electricity to power more than 500,000 UK homes.
As part of the deal signed with Orsted, PKA and PFA will each acquire 25% ownership interest in the project, which is scheduled to be commissioned in the second half of 2018.
Image: The Walney offshore wind farm will feature 87 wind turbines. Photo: courtesy of Legal & General Group plc.