Malaysian national electric utility Tenaga Nasional Berhad (TNB) has completed acquisition of a 50% stake in a 365MW solar portfolio in the UK from a subsidiary of Terraform Power for £470m.

The transaction marks the first investment of TNB in renewable generation capacity in Europe and is part of its five-year global expansion plan.

TNB has now achieved one of its main goals of acquiring up to 250MW of renewable energy capacity by 2020.

The company's global renewable energy portfolio stands at 252MW after combining last year’s acquisition of a 30% stake in India-based GMR Energy for $300m and acquisition of a 30% stake in Turkey-based Gama Enerji for $243m.

TNB made the acquisition through Vortex Solar UK which in turn is an indirect wholly owned subsidiary of Vortex Solar Investment, a TNB joint venture which acquired a 100% interest in the portfolio.

TNB holds 50% stake in Vortex while the other joint venture partner is Beaufort Investments which holds the remainder stake. 

Touted to be one of the country’s largest solar portfolios, the acquisition includes 24 solar photovoltaic farms for which Vortex Solar UK had entered into a sale and purchase agreement in January.

TNB CEO Datuk Seri Ir. Azman bin Mohd said: “The acquisition also helps us deliver the renewable energy part of TNB's international expansion plan more than one year ahead of schedule."

"The assets are an excellent investment and are earnings enhancing, with 80% of revenue under long term, 15-year power purchase agreements and subsidized by Renewable Obligation Certificates for 20 years."

The acquisition was funded by TNB through the proceeds coming from a $750m bond it issued in October 2016.

Image: TNB headquarters in Kuala Lumpur, Malaysia. Photo: courtesy of Khairul hazim/