Centrica sells wind farms to consortium

Centrica and its 50% joint venture partner EIG Global Energy Partners have agreed a sale of the Glens of Foudland, Lynn and Inner Dowsing wind farms (GLID) to a consortium.

The consortium comprises the UK Green Investment Bank Offshore Wind Fund and funds managed by BlackRock, and the assets were sold for an enterprise value of £423m.

The British Gas owner said that after repayment of debt associated with GLID and other costs, its net share of the proceeds will be around £115m.

Glens of Foudland is an onshore wind farm in Aberdeenshire, while the Lynn and Inner Dowsing offshore wind farms are off the coast of North East Lincolnshire.

Centrica said the disposal was in line with its strategy to sell its interests in wind power generation while continuing to purchase wind power.

The company said it will continue to purchase 100% of the power and 50% of the renewable obligation certificates from the three wind farms under existing power purchase agreements until 2024.

Whitman Howard analyst Angelos Anastasiou said the disposal is very much in line with the strategy decided following CEO, Iain Conn’s Strategic Review. However, he said of more interest in the short term will be the final results on 18 February, including further updates on progress in the implementation of the SR, and the Competition and Markets Authority (CMA) Supply Review Provisional Remedies announcement in March.

“We continue to think that Iain Conn and his team are moving Centrica in the right direction. Hence, we still believe that the intrinsic value that we see in Centrica should begin to feed through over the medium term, as the new strategy is implemented,” he said.

At 1154 GMT, Centrica shares were up 0.3% to 197.26p.