"This acquisition adds a high quality, large scale operating wind farm portfolio in Italy and Germany to our European renewables business," says Philip Cox, CEO of International Power, a distant descendent of Britain's' state owned national utility before its privatisation in 1991. "Both Italy and Germany are attractive markets with significant growth targets for renewable generation, supported by clear regulatory frameworks."
International Power is acquiring the Trinergy portfolio for an enterprise value of EUR 1839 million, to include a cash consideration of EUR 868 million, funded by EUR 300 million of non-recourse acquisition debt and current liquid resources of EUR 568 million. The enterprise value being paid is higher than the book value of Trinergy's total assets at end December 2006. Apart from its mainland European sites, Trinergy also owns an 18.7 MW wind farm at Castlebar in Ireland which was not included in the deal.
Price linked to income
James Flanagan from International Power insists the price paid for Trinergy's assets is comparable with other recent large wind plant acquisitions which, he says, have also been around EUR 2700 per kilowatt installed. The sum, however, appears to be more than just paid by German E.ON for assets in Spain (page 50). The price paid reflects the income expected from the sites, says Flanagan, most of which are in Italy where they can receive about EUR 160/MWh, one of the highest wind power purchase prices in the EU, he says.
The deal is due to reach financial close by the end of this month and International Power expects the portfolio to be cash flow positive from the first full year of ownership.
As well as 1053 MW of wind stations in operation, International Power, which operates 18 GW of conventional power generation, now has 99 MW of wind plant under construction. The Trinergy deal is the company's second large wind portfolio acquisition. Last November it paid EUR 567 million for Christofferson Robb & Company's 436 MW Levanto portfolio of 412 MW of operational capacity in Germany and France and 24 MW due to commission in 2008. International Power also owns a 46 MW wind plant in Australia and in June acquired the rights to an 8 MW project in Germany and the following month, a 14 MW operational wind farm in the Netherlands.
The company is looking for further opportunities to expand its wind presence, particularly in Europe. The new acquisition gives it a platform for developments in the Italian market, possibly with local partners, says Flanagan. "Other potential markets are Germany, France, Spain and the UK," he says.
Meantime, Trinergy, at least according to its website, still intends to be active in renewables. Director Paul Williams says: "We continue to focus on investment opportunities in the renewable sector and are looking forward to developing our project pipeline further."