GCP Infrastructure Investments Regulatory News (GCP)

29 November 2013



GCP Infrastructure Investments Limited

("GCP" or "the Company")

Investments totalling £21.2 million

c. 19 year loan notes yielding c.9.8%

GCP, the UK's only listed infrastructure fund focused primarily on investments in UK infrastructure debt, is pleased to announce that on 26 November 2013 the Master Fund completed a transaction subscribing for loan notes with a term of c.19 years and an aggregate value of £21.2 million (the "Notes"). The yield on the Notes will be c. 9.8% per annum.

The Notes will be issued to the Master Fund by GCP Onshore Wind 3 Limited, a single purpose company, and the proceeds from the issue of the Notes will be used to make a loan secured on a senior-ranking basis against a single site five turbine 15MW wind farm to be developed in Northern Ireland.

All payments of both principal and interest in relation to the Notes are expected to be serviced from income arising from the generation of electricity by the wind farm in the form of receipts from the sale of Northern Ireland Renewable Obligations Certificates ("NIROCs") and of the electricity under a Power Purchase Agreement. NIROCs are issued by Ofgem.

The acquisition of the Notes has been financed from available cash reserves.

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 "Target Assets"). The Company achieves this by investing substantially all of its capital in GCP Infrastructure Fund Limited (the "Master Fund"), an open-ended investment company that holds the Target Assets. The Company is the majority shareholder of the Master Fund. The Company and the Master Fund are advised by Gravis Capital Partners LLP (the "Investment Adviser").

The Renewables Obligation

The Northern Ireland Renewables Obligation ("NIRO") is the main policy measure of the Department of Enterprise, Trade and Investment for supporting the development of renewable electricity in Northern Ireland. The NIRO was introduced on 1 April 2005. The NIRO places a legal requirement on electricity suppliers to account for a specified and increasing proportion of their electricity as having been supplied from renewable sources or to pay a buy-out fee that is proportionate to any shortfall.

 Suppliers provide evidence of compliance by presenting Renewables Obligation Certificates ("ROCs") which are issued to generators of renewable electricity for each unit of eligible output. The number of ROCs issued for each MWh unit varies depending on the technology involved and its generating capacity. The NIRO operates in tandem with two similar Obligations in Great Britain - the Renewables Obligation in England & Wales and the Renewables Obligation Scotland.

ROCs issued in Northern Ireland under the NIRO ("NIROCs") are tradable with those issued under the two GB Obligations ("GBROCs") in a UK-wide market for ROCs; both NIROCs and GBROCs are accepted as the necessary evidence under each of the Obligations. ROCs (both NIROCs and GBROCs) are issued by the Gas and Electricity Markets Authority, which, in the case of NIROCs, is acting on behalf of the Northern Ireland Authority for Utility Regulation. The Gas and Electricity Markets Authority carries out day to day administration of both NIROCs and GBROCs through its office (Ofgem).

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. In April 2010, the end date of the RO was extended from 2027 to 2037 for new projects to provide long-term certainty for investors and to ensure continued deployment of renewables to meet the UK's 2020 renewables target and beyond.