International Public Partnerships Share News (INPP)

(Sharecast News) - Infrastructure investor International Public Partnerships announced on Tuesday that Transmission Capital Partners, the consortium comprising itself, Amber Infrastructure Group and Transmission Investment, has successfully reached financial close for the long-term ownership and operation of the transmission link to the 400MW Rampion offshore wind farm.
The FTSE 250 company said the project would be its ninth offshore transmission owner (OFTO) investment, and related to the transmission cable connection to the wind farm 13 kilometres off the Sussex coast.

It said the wind farm consisted of 116 3.45MW wind turbine generators connected to an offshore substation platform (OSP), located within the boundaries of the Rampion wind farm.

The investment would increase the company's contribution to the UK's transition to a zero-carbon economy, the board said.

It said the Rampion OFTO had the ability to transmit green electricity equivalent to the consumption of around 350,000 UK homes, increasing the number of homes that could be powered via the company's OFTO portfolio to around 2.1 million homes.

The firm said it was taking no exposure to electricity production or price risk, but was being paid a pre-agreed, availability-based revenue stream over 20 years, which was fully linked to UK inflation via the retail prices index.

International PPL said it would make a £35m investment for 100% of the equity and subordinated debt in TC Rampion OFTO.

Project-level senior debt would be provided by a group of banks to match the maturity of the OFTO revenue period, so there was no refinancing risk.

Its board highlighted the fact that the investment was an operational and immediately-yielding asset with no construction or refinancing risk, with International PPL to benefit from the 20-year availability-based revenue stream, with protected downside whereby maximum potential deductions would be capped at 10% of base revenue in any year.

The operations and maintenance of the OFTO assets would be subcontracted to a set of specialist contractors incentivised to maximise availability of the transmission assets, with the returns generated from the company's investment "highly correlated" to the RPI, and not subject to any revenue or penalty exposure to wind farm performance.

Revenues were contracted by a subsidiary of National Grid, the National Grid Electricity System Operator (NGESO), rated Baa1 by Moody's, in that company's statutory ring-fenced role as electricity systems operator (ESO).

The investment was funded through the company's £250m revolving credit facility, which, following the Rampion OFTO investment, would be £108m net drawn.

International PPL noted that it was also the preferred bidder on the East Anglia One OFTO, with a committed investment of £90m.

"We are proud to report that our portfolio of OFTO investments, following the completion of our ninth OFTO, helps provide over two million UK households with clean energy helping the UK achieve net zero," said International PPL chair Mike Gerrard.

"In addition, the long-term, inflation-linked revenue that these investments deliver is consistent with the company's investment objectives and demonstrates its ability to continue originating a strong pipeline of investment."

At 0837 GMT, shares in International Public Partnerships were up 0.23% at 171.8p.