International Public Partnerships Regulatory News (INPP)

INPP reaches financial close on DudgEon Offshore Transmission Project

7 November 2018

International Public Partnerships Limited, the listed infrastructure investment company ("the Company", "INPP") has announced that Transmission Capital Partners - the consortium comprising INPP, Amber Infrastructure Group and Transmission Investment ("the Consortium") - has successfully reached financial close for the long-term ownership and operation of the transmission link to the 402MW Dudgeon offshore wind farm (the "OFTO").

Located 32km off the coast of Cromer in North Norfolk, Dudgeon OFTO transmits clean power to over 410,000 UK homes by generating electricity using 67 6MW offshore wind turbines.

Dudgeon OFTO is the seventh UK offshore transmission project in the Company's portfolio. In total, the Company's OFTO investments transmit approximately 1.5GW of renewable electricity - or roughly 10 per cent of the UK's current installed and operational wind capacity - to power the equivalent of over 1.5 million UK homes.

In order to support the UK's clean energy transition, offshore transmission remains a vital component in the supply chain to connect offshore renewable power with the UK's electricity grid, and since 2011, the Consortium has mobilised a total of c.£1 billion of long-term private sector network investment into offshore transmission to support the UK's green economy.

The Company will make a c.£46 million investment for 100% of the equity and subordinated debt in TC Dudgeon OFTO plc. Approximately 85% of the Dudgeon offshore transmission assets acquisition will be funded by way of a public bond issuance which received a (P)Baa1 rating from Moody's.

The key investment highlights include:

· An operational and immediately yielding asset with no construction or refinancing risk - Dudgeon OFTO is currently operational under the ownership of Equinor ASA, Masdar and China Resources (Holdings) Co. Ltd., the owners of the wind farm to which the OFTO is connected;

· INPP will benefit from a 20-year availability-based revenue stream with protected downside whereby maximum potential deductions will be capped at 10% of base revenue in any year;

· The operations of the OFTO assets will be subcontracted to the wind farm owner to maintain (and repair) the assets at its own cost and the wind farm owner will bear the risk if Ofgem's 98% availability target is missed;

· The returns generated from the Company's investment are highly correlated to UK RPI and are not subject to any revenue or penalty exposure to windfarm performance;

· Revenues are contracted by a subsidiary of National Grid, the National Grid Electricity Transmission plc (NGET) in their statutory ring-fenced role as national electricity systems operator (NGET rated 'A-' S&P; 'A' Fitch).

The investment has been funded with proceeds from the capital raise the Company conducted in October 2018. With a cash balance of c.£40 million available for further investments and its £400 million revolving credit facility currently undrawn, the Company is well positioned to support its c.£200 million of nearer term investment commitments, including further investment into Cadent gas distribution.

Rupert Dorey, Chairman of International Public Partnerships said: "As our seventh OFTO investment, the Company and its consortium has played a pivotal role in the development of offshore transmission into a low-risk, investible green technology. With the commencement of the next round of Ofgem's competitive OFTO tenders, we look forward to maintaining the balance that our stake in UK electricity transmission brings to the Company's portfolio by continuing to generate durable, low-risk and inflation-linked returns for our investors. This investment is further evidence of the Company's ability to continue originating an attractive pipeline of investment opportunities with PPP-style characteristics."

A copy of the Ofgem press release can be found at https://www.ofgem.gov.uk/news-media/latest-news-press-releases.

ENDS.

For further information:

Erica Sibree/Amy Joslin +44 (0)20 7939 0558/0587

Amber Fund Management Limited

Hugh Jonathan +44 (0)20 7260 1263

Numis Securities 

Ed Berry/Mitch Barltrop +44 (0) 20 3727 1046/1039FTI Consulting

About International Public Partnerships (INPP):

International Public Partnerships ('INPP') is a listed infrastructure investment company which invests in global public infrastructure projects and businesses.

Listed in 2006, INPP is a long-term investor in 129 infrastructure projects and businesses, including schools, hospitals, courts, police headquarters, transport and utility and transmission projects in the UK, Europe, Australia and North America. INPP seeks to provide its shareholders with both a long-term yield and capital growth through investment across both construction and operational phases typically of 25-40 year concessions.

Amber Infrastructure Group ('Amber') is the Investment Adviser to INPP and consists over 120 dedicated staff who manage, advise on and originate investments for INPP.

Visit the INPP website at www.internationalpublicpartnerships.com for more information.