A London-based renewable energy investor is eyeing wind farms in Scotland and said the no vote in the independence referendum will make it easier to raise money to buy assets in the sector.
Greencoat UK Wind said it is looking at a number of wind farms in Scotland, which it thinks could be put up for sale by owners who want to recover the heavy costs of developing such assets.
Steve Lilley, a partner in the fund that manages Greencoat UK Wind, said: “There are a number of things we see coming around.”
He said it was very likely Greencoat would buy one of the wind farms concerned but declined to give further details.
However, he underlined Greencoat’s enthusiasm for Scotland, which has taken a bigger share of the firm’s investment than the rest of the UK.
Five of Greencoat’s 16 windfarms are in Scotland.
The company underlined its enthusiasm for Scotland in August when it bought two wind farms in the country underlining its confidence in the commercial potential of such assets in the country.
Greencoat UK Wind bought a 51.6 per cent stake in the North Rhins Wind Farm in Dumfries and Galloway and the Drone Hill Wind Farm in the Borders, along with two in England, for a total of £90.6 million.
Mr Lilley said Greencoat’s enthusiasm for Scotland reflects the fact the country is blessed with the kind of weather conditions that are best for generating wind power.
The wind farms Greencoat operates at North Rhins near Stranraer and Kildrummy in Aberdeenshire are the two windiest in its portfolio.
The winds recorded at North Rins are stronger than those found offshore.
Mr Lilley welcomed the result of the recent referendum when 55 per cent of votes cast were opposed to Scotland becoming independent.
He said: “We have taken a view for a long time that we did not think a yes vote would have caused any great valuation issue for the company but it would have been confusing for investors until it became clear how the new UK would function.”
He added: “Fund raising could have been difficult after a yes vote. I think investors may have wanted to see how it worked before they wanted to invest.”
Mr Lilley noted areas of uncertainty included the power grid and how the official support mechanisms for encouraging firms to invest in renewable energy generating assets would work.
He said the no vote makes life easier and much more straightforward for Greencoat.
The company was one of a number of firms that felt confident enough about market sentiment to launch fund raisings on the London Stock Exchange last week.
Greencoat wants to raise £100 million to refinance existing borrowings and give it additional firepower for acquisitions.
The company said it is actively engaged in due diligence on a number of potential targets, without giving details.
Mr Lilley said it is a good time to be a buyer of assets like wind farms.
“We see there’s a lot of opportunities; a lot of people are selling things,” said Mr Lilley. He noted that many farms have been built by utilities that now want to recycle the capital tied up in such assets into other projects.
“There’s far more coming through the door than we can buy,” he said.
Greencoat operates the giant Braes of Doune wind farm near Stirling and the smaller Carcant facility in the Borders.
In March Greencoat said it had generated eight per cent more electricity than targeted in the nine months to December.
The company said the Braes of Doune farm, of which it owns 50 per cent, was the biggest contributor.
Both farms in Scotland generated more than budgeted in the period.
Greencoat UK Wind is managed by Greencoat Capital. The company listed on the main market in London at the end of March last year and raised £260m to buy a seed portfolio of six UK wind farms from Scottish HydroElectric owner SSE and RWE.
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