Octopus Renewables Infrastructure Trust (ORIT) has entered into a conditional agreement to divest the Krzecin and Kuslin onshore wind farms in Poland, boasting a combined capacity of 60 megawatts (MW), to an affiliate of Orlen.
These wind farm projects, located in the Provinces of Poznań and Szczecin, commenced operations in 2022. Kuślin, one of the sites, began its operations in December 2022, with an estimated operational lifespan of around 30 years. This farm features a total installed capacity of approximately 40 MW, equipped with 12 Vestas turbines, each boasting a capacity of 2.4 MW.
The second site, Krzęcin, situated in the Province of Szczecin near Choszczno, was established in February 2022, with a similar estimated operational life of 30 years. The project comprises eight Nordex turbines, each with a capacity of 3.3 MW, resulting in a total installed capacity exceeding 19 MW.
Upon the completion of this acquisition, Orlen will significantly bolster its renewables capacity, reaching nearly 1 gigawatt (GW) in total.
Daniel Obajtek, Chief Executive and President of Orlen, highlighted the company's strategic vision, stating, “We are effectively advancing toward strategic goals, which include having 9 GW of installed renewable energy capacity by 2030. These two additional wind farms, with a combined capacity of about 60 MW, are modern units with great potential to produce clean and affordable energy for decades, benefiting the people and Poland's increasingly competitive economy.”
ORIT anticipates receiving net proceeds ranging from PLN 470 million to PLN 490 million (equivalent to approximately £88 million to £92 million) following the repayment of asset-level debt and termination of hedging arrangements. This represents a premium of 14% to 19% over the holding value of the Krzecin and Kuslin wind farms, valued at £77 million as of June 30, 2023.
The completion of this transaction is expected to yield an Internal Rate of Return (IRR) ranging from 25% to 30% over the lifetime of ORIT's investment.
This sale aligns with ORIT's strategic plan to release capital through the divestment of select assets. The proceeds will initially be utilized to repay short-term debt facilities and may subsequently be reinvested in projects offering opportunities for capital growth and greater impact, including the development of new renewable energy projects such as wind and solar farms.
Chairman of Octopus Renewables Infrastructure Trust, Phil Austin, emphasized the company's commitment to making a positive impact through renewable investments, stating, “As the company's portfolio becomes increasingly weighted towards operational assets, selling some of these now and paying down short-term debt will then give ORIT the ability to explore new opportunities to build more green energy projects.”
