Last checked at 
8 Sep 2014 11:16
8 September 2014
GCP Infrastructure Investments Limited
("GCP" or "the Company")
Investment commitment totalling c.£8.4 million
c.16 year loan notes yielding c.9.0%
GCP, the only listed fund focused on investments in UK infrastructure debt, is pleased to announce the completion of a transaction committing to subscribe for loan notes with a term of c.16 years and an aggregate value of c.£8.4 million (the "Notes"). The yield on the Notes when issued will be c.9.0% per annum.
The Notes will be issued by GCP Onshore Wind 1 Limited, a single purpose company, which will use the proceeds to make a loan secured on a senior-ranking basis against a single site, five turbine, 10MW wind farm to be developed in England.
All payments of both principal and interest in relation to the Notes are expected to be serviced following commissioning from income arising from the Renewables Obligation Certificates (ROCs) generated by the operation of the wind farm and from the sale of electricity. ROCs are issued by Ofgem.
The acquisition of the Notes has been financed fully from available cash reserves.
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Gravis Capital Partners LLP |
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Stephen Ellis | +44 (0)20 7518 1495 |
Rollo Wright | +44 (0)20 7518 1493 |
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Oriel Securities |
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Neil Winward | +44 (0)20 7710 7600 |
Mark Bloomfield |
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Tunga Chigovanyika |
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Cenkos Securities |
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Dion Di Miceli | +44 (0)20 7397 1921 |
Tom Scrivens | +44 (0)20 7397 1915 |
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Buchanan |
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Charles Ryland | +44 (0)20 7466 5000 |
Sophie McNulty |
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Notes to Editors
The Company
The Company is a closed-ended investment company that seeks to generate returns from senior and subordinated infrastructure debt and related and/or similar assets. The Company is advised by Gravis Capital Partners LLP (the "Investment Adviser").
The Renewables Obligation
The Renewables Obligation ("RO") was introduced in the UK in 2002 and is administered by Ofgem. It was established to encourage the development of renewable energy generation by providing financial support to primarily mid- to large-scale renewable electricity generation projects in the UK. The end date for the RO of 2037 provides long-term certainty for investors and promotes the continued deployment of renewable energy projects to meet the UK's 2020 green energy target and beyond.
Under the RO, Ofgem issues ROCs to renewable electricity generators ("Renewable Generators") for every megawatt hour ("MWh") of eligible renewable electricity they generate. Policy in respect of ROCs in the UK is set by the Department for Energy and Climate Change.
UK electricity suppliers (the "Suppliers") are required to present a certain number of ROCs per MWh of electricity they supply (the "Obligation") to Ofgem at the end of each six month period. The Renewables Obligation Order 2009 requires that the Secretary of State announces the level of the Obligation six months preceding an obligation period. Driven by the expected production of electricity from eligible renewable sources in any given period, the Obligation is floored at 8% above the expected number of ROCs to be issued (the "Headroom").
Where Suppliers do not present sufficient ROCs, they have to pay a penalty known as the buy-out price. This is set at £43.30 per ROC for the 2014/15 compliance period, and rises annually by reference to RPI. All buyout payments are redistributed to Suppliers who have presented ROCs against their obligation in proportion with the number of ROCs that each has presented.
Renewable Generators can sell ROCs either with or separately from the electricity generated thus creating a market for ROCs. The Headroom means that the value of ROCs is likely to be floored at the buyout price (unless in any given period the actual renewable energy produced exceeds expectations by more than 8%).