Octopus Renewables agrees sale of Swedish wind farm

Octopus Renewables Infrastructure Trust (ORIT) announced a conditional agreement on Thursday, to sell the Ljungbyholm onshore wind farm in Sweden to a German institutional investor for around €74m.

The London-listed company said the transaction, part of its capital recycling programme, aligned with its valuation of Ljungbyholm as of 31 March, and was expected to realise an internal rate of return (IRR) of about 11% over its investment period.

It said the net proceeds would primarily be used to repay part of ORIT's short-term debt facility.

Completion was contingent on receiving foreign direct investment approval from the Swedish Inspectorate for Strategic Products, anticipated later in the year.

ORIT acquired the 48 MW Ljungbyholm wind farm at the pre-construction stage in March 2020, investing around €68m in the project.

The investment manager, Octopus Energy Generation, managed the construction phase, bringing the wind farm into operation in June 2021.

ORIT said the sale was a continuation of its capital recycling efforts, following the disposal of two Polish onshore wind assets in December and the divestment of an option over a Spanish solar photovoltaic project in January.

On completion of the Ljungbyholm sale, the capital recycling programme would have generated around £159m.

Other projects within the programme were ongoing, and ORIT said it would provide updates as necessary.

Newsec Energy Transition advised ORIT on the transaction.

“We are pleased to enter this transaction, which is another key part of ORIT's capital recycling programme,” said chairman Phil Austin.

“The agreed price further supports the company's valuations, and once the transaction is completed it will enable us to reduce our short-term debt which, as we have previously communicated, is a key objective for us at this time.

“Ljungbyholm was the company's first investment following ORIT's IPO, and the exit further demonstrates our investment manager's ability to manage the construction and operation of new renewable energy assets, which helps to drive the transition to net zero.”

At 1207 BST, shares in Octopus Renewables Infrastructure Trust were up 0.32% at 75.24p.

Reporting by Josh White for Sharecast.com.