Octopus Renewables Infrastructure Trust (ORIT) has entered a conditional agreement to sell the 48 megawatt (MW) Ljungbyholm wind farm in Sweden to a German institutional investor for €74 million. This transaction is part of ORIT's capital recycling programme and aligns with the company's valuation of Ljungbyholm as of March 31, 2024.
The sale is expected to yield an internal rate of return (IRR) of approximately 11% over the investment's lifetime. The net proceeds are intended to primarily repay part of ORIT's short-term debt facility. Completion of the deal is contingent on receiving foreign direct investment approval from the Swedish Inspectorate for Strategic Products, which is anticipated later this year.
ORIT acquired the Ljungbyholm wind farm at the pre-construction stage in March 2020, investing €68 million. The wind farm became operational in June 2021 under the management of Octopus Energy Generation.
This sale follows ORIT's divestment of two Polish wind assets in December 2023 and an option over a Spanish solar project in January 2024. Upon finalizing this transaction, ORIT's capital recycling programme will have generated approximately £159 million.
Newsec Energy Transition advised ORIT on the transaction. ORIT chairman Phil Austin commented, “We are pleased to enter this transaction, which is another key part of ORIT's capital recycling programme. 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.”
