TNB’s Maiden Foray Into Onshore Wind Portfolio In The UK

TNB’s Maiden Foray Into Onshore Wind Portfolio In The UK - KUALA LUMPUR: Tenaga Nasional Bhd (TNB) made its maiden foray into onshore wind in the UK with the acquisition of an 80% interest in two renewable energy (RE) companies registered in the UK for  a cash equity consideration of 77.37 million pound (RM417.5mil).

In a filing with Bursa Malaysia Thursday, TNB said its wholly owned subsidiary, Tenaga Wind Ventures UK Ltd had completed its acquisition of an 80% interest in two (UK) renewable energy companies namely GVO Wind Limited and Bluemerang Capital Limited through two share purchase agreements (SPAs) with Georg von Opel and Tanzanite B.V. & Catalin Breaban respectively.

“This acquisition marks TNB’s maiden foray into onshore wind in the UK. It is part of TNB's five-year international expansion roadmap,” TNB said in a statement.

The utility giant intends to to grow its RE portfolio to an optimal size via greenfield development or acquiring other RE portfolio of similar or complementary technology.  

The combined portfolio of GVO Wind Limited and Bluemerang Capital Limited is the largest Feed-in Tariff (FiT) wind portfolio in the UK comprising 53 operational onshore medium wind turbines, with a total combined capacity of 26.1MW spread across the UK.

This is TNB’s second acquisition in the UK after the 2017’s acquisition of the Vortex Solar photovoltaic assets.

TNB funded the acquisition through a combination of internally generated funds and borrowings.

The purchase equity consideration of 77.37 million pound is the 80% equity value based on the agreed and fixed enterprise value (EV) of 171.23 million pound for the purchase of 53 wind turbines.

TNB said the acquisition of an operating wind portfolio was a “low risk investment to TNB” as there is no exposure to planning and construction risk.

The wind portfolio is comprised of young assets, with an average age of 2.5 years and an estimated useful life of 25+ years.

The assets are located across the UK, providing a diversification and natural hedge to individual onshore wind turbine revenue risk.

Additionally, TNB said the portfolio was supported by a 20-year UK government-backed FiT renewable support mechanism and offers attractive financial returns with earnings accretive from year one.

TNB president/CEO, Datuk Seri Ir. Azman Mohd said the acquisition of onshore wind assets in the UK was a relatively new commercial venture by TNB.

“This acquisition will strengthen TNB’s RE portfolio to its asset base and enhancing TNB’s technical and commercial insights in RE market space. TNB looks forward for future investments that will bring synergy to the company.”

With the completion of the acquisition, TNB’s international renewable energy portfolio will have a combined net installed capacity of circa 280 MW following its previous acquisition of Vortex Solar Investments S.a.r.l in 2017, a portfolio of 24 solar photovoltaic farms and other RE assets in its acquired power portfolio in Turkey and India.