Greencoat to buy Vattenfall's South Kyle Wind Farm for GBP320m on completion
Greencoat UK Wind has agreed to buy a Scottish wind farm for GBP320 million, once it has been built by Vattenfall Wind Power.
The South Kyle Wind Farm is a subsidy free wind farm, located 5km to the east of Dalmellington on the boundary of Dumfries and Galloway, and East Ayrshire in Scotland. It will consist of 50 turbines with aggregate generating capacity of 240mw and a grid connection of 235mw, and will be able to power approximately 170,000 UK homes. The wind farm is fully consented.
The South Kyle Wind Farm has entered into a route-to-market PPA with Vattenfall Energy Trading for the 15 years following commissioning. Vattenfall will construct the wind farm and will manage the asset on behalf of Greencoat UK for a minimum of 10 years once operational.
In addition to supporting the local economy through new jobs created, once operational, the wind farm will provide GBP38 million of direct investment into local schemes through its community benefit programme over the lifetime of the wind farm.
Tim Ingram, Chairman of UKW, commented: "We are delighted to enter into an agreement with Vattenfall, our fifth major utility partner. South Kyle is in close proximity to a number of other wind farms already owned by Greencoat UK Wind, and we are confident it will be another high quality addition to our portfolio."
Laurence Fumagalli of Greencoat Capital adds: "We are pleased with the transaction, which will bring a large scale subsidy free wind farm under our ownership. While we continue to expect the majority of our portfolio to comprise ROC accredited assets, the scale of our portfolio and balance sheet allows us to acquire a combination of different types of UK wind farms, such as South Kyle, and thereby find best value for shareholders."
In line with UK government guidance to ensure the safety of employees amid the Covid-19 pandemic, construction of the wind farm will begin once it is appropriate to do so.
Therefore, a timeline for construction is yet to be confirmed. Vattenfall is continuously monitoring precautions concerning Covid-19 and currently plan for the wind farm to be operational early 2023.
“The planned construction of the South Kyle Wind Farm shows our commitment to the United Kingdom and its transition to climate neutrality as well as delivering on Vattenfall’s goal to enable fossil free living within one generation,” says Magnus Hall, CEO of Vattenfall.
“The transition towards a fossil free future is in full swing and requires large investments in renewable energy. Therefore, we are delighted to be partnering with Greencoat UK Wind and realise the South Kyle Wind Farm. South Kyle will significantly contribute to the renewable energy production in Scotland,” says Gunnar Groebler, senior vice president and head of business area wind at Vattenfall.