Octopus Renewables Infrastructure Trust (ORIT) has successfully finalized the sale of the Krzecin and Kuslin onshore wind farms in Poland to an affiliate of Orlen, a transaction that underscores the company's commitment to its capital recycling program.
The combined capacity of the Krzecin and Kuslin wind farms is 59MW, generating sustainable energy for over 100,000 homes and preventing an annual emission of approximately 150,000 tonnes of carbon dioxide.
Completion of the transaction was contingent on competition approvals, which have now been secured, according to ORIT. The net proceeds from the sale, totaling approximately £92m, represent a 21% premium over the holding value of the wind farms as of September 30, 2023. This positive outcome is in line with the company's expectations upon entering the sale agreement in October 2023.
The funds will predominantly be utilized to retire ORIT's short-term debt facilities. The completion of the transaction is expected to yield an internal rate of return (IRR) of around 30% over the lifetime of ORIT's investment.
ORIT initially acquired the Krzecin and Kuslin wind farms during their construction phase in October 2021 and successfully managed the construction, bringing the wind farms into operation in 2022.
Phil Austin, Chairman of Octopus Renewables Infrastructure Trust, expressed satisfaction with the capital recycling program's inaugural success, stating, “This transaction is an excellent result for the Company, delivering a strong uplift to the Company's NAV. It demonstrates our Investment Manager's ability to manage the construction of new renewable energy assets, which help to accelerate the transition to net zero and also to deliver capital growth for shareholders through active asset and portfolio management.”
