Englefield leads £400m wind deal

Englefield Capital has joined forces with First Islamic Investment Bank to provide a £400m financing program for RWE Innogy’s UK-based wind farm portfolio.

Englefield Capital, the UK-based private equity house headed by former Warburg Pincus partner Dominic Shorthouse, has partnered with First Islamic Investment Bank to invest in a £400 million ($732 million; €582 million) UK wind farm project.


Englefield, which lists renewable energy as one of its main investment areas, and First Islamic Investment Bank, which on its website says it adheres to strict Islamic investment principles, will each take a 33 per cent stake in RWE Innogy’s operating wind farm portfolio, the UK’s largest green power generating business.


Under the deal, the investors have committed to purchase all the wind farms which are presently owned by RWE Innogy and those which will be constructed by its development team over the next three years. At the same time RWE Innogy’s trading subsidiary, Npower, will purchase the electricity output of the portfolio under long term contracts as part of its strategy to meet the British Government’s Renewable Obligation targets. 


A source close to Englefield said that £100 million of the £400 million project would be used to acquire the existing energy assets, with the remainder used to finance future developments. A £300m non-recourse debt facility has been raised to facilitate the transaction, which will also be available for any future acquisitions connected with the deal.


The assets being transferred comprise the largest wind farm portfolio in the UK, with wind farms throughout mainland Britain and including the recently constructed North Hoyle offshore wind farm. NWP will retain its existing renewable energy development team of approximately 80 professional staff.


RWE Innogy’s wind energy subsidiary, National Wind Power, the UK’s leading windfarm developer, will continue to develop and construct new wind farms and manage the assets involved thereby creating further green energy generation capacity and meeting the ROC targets. 


Englefield Capital and FIIB were working with London-based merchant bank Augusta & Co, which counts advising on debt and equity raising in the renewable sector among its core interests. Andrew Lee, partner of Augusta, said the completed portfolio would be “the best renewable generating portfolio in the UK and will make a major contribution to the clean energy objectives of the Government in the UK.”


In a statement today, Englefield said it intends to make further investments in the renewable energies sector as opportunities arise. 


Englefield Capital raised its debut investment fund of €700 million in 2003 to invest in buyout and development capital opportunities primarily in the United Kingdom and other countries in Western Europe.


First Islamic Investment Bank is headquartered in Bahrain with offices in Atlanta and London. To date, First Islamic has completed investment transactions with a total value in excess of $4 billion.