Renewable Energy Generation has announced the sale of its 10MW St.Breock and 8MW Ramsey II wind farm projects to a fund managed by BlackRock for a total enterprise value of £36m.
Under the agreement, BlackRock will assume project debts of £21m, once fully drawn, and REG will receive upfront cash consideration of £13.1m, with a further £1.9m payable following commissioning of the projects in 2015.
Construction funding will continue to be drawn from the existing project finance facility with ING Bank N.V. following the successful financing in June 2014.
REG will oversee construction of the projects under a Construction Management Agreement and once operational, will operate the projects on behalf of BlackRock through an Asset Management Agreement.
The proceeds will be reinvested into REG’s portfolio of consented projects including Rodbaston (4MW), French Farm (4MW), Brackagh Quarry (6MW) and Barlborough (0.9MW) as well as further REG Bio-Power projects, which REG intends to build during 2015.
Andrew Whalley, Chief Executive Officer said: “We are delighted to continue our strong partnership with BlackRock through the sale of these two projects as we demonstrate the value REG is creating through its development strategy.
“REG highly values the relationship it has developed with ING and is looking forward to working together on future financings.
“This transaction also marks REG’s first appointment as Construction Manager for BlackRock. With our considerable in-house experience, this is a role we are well-equipped to fulfil on similar transactions in future.
“REG will maintain close links with the local communities in which these projects are based as part of its oversight of the important community funds, which will support local initiatives throughout the wind farms’ operating lives.”