Centrica (LON:CNA) is off-loading three wind farms for £115mln as part of a drive to quit the sector, although it will still buy wind power from the schemes.
The owner of British Gas and its 50% joint venture partner EIazkes Global Energy Partners (EIG) have agreed a joint sale of the Glens of Foudland, Lynn and Inner Dowsing wind farms (GLID) to a consortium, comprising the UK Green Investment Bank Offshore Wind Fund and funds managed by BlackRock, for an enterprise value of £423mln.
After repaying debt linked to GLID and other costs, Centrica’s net share of the proceeds will be about £115mln.
Glens of Foudland is a 26 megawatt (MW) onshore wind farm in Aberdeenshire and the 194MW Lynn and Inner Dowsing offshore wind farms are off the coast of North East Lincolnshire.
Centrica said the sale was in line with its strategy to dispose of its interests in wind power generation, while continuing to purchase wind power.
The group has had a rocky ride with its wind farms amid global economic headwinds and industry-wide challenges such as planning delays, difficulties in linking farms to the national power grid and a lack of wind turbines.
In 2008, it reviewed the economic viability of the portfolio and its plans to build new schemes due to rising costs following the credit crunch.
It bought Glens of Foudland in October 2004 and fully commissioned it in July 2005. The group started building Lynn and Inner Dowsing in 2006 and fully commissioned them in March 2009.
The sale, which is due to complete in March, is expected to result in a profit on disposal for Centrica of around £70mln, which it is likely to treat as an exceptional item in its 2016 Interim financial results.
The company will continue to buy all the power and half the Renewable Obligation Certificates (ROCs) from the three wind farms under existing power purchase agreements until 2024.
Centrica will continue to provide operations and maintenance support to GLID up to March 2017.