The EKITD consortium, comprising UK infrastructure investor Equitix Investment Management Limited (“Equitix”) and Kyuden Group – consisting of Kyuden International Corporation (“KIC”) and Kyushu Electric Power Transmission and Distribution Company, Incorporated – has successfully reached financial close on the acquisition of offshore power transmission assets from Seagreen Wind Energy Limited (“SWEL”), the developer of the Seagreen Phase 1 Offshore Wind Farm. SWEL is a joint venture by SSE Renewables, TotalEnergies and PTTEP.
Located approximately 27 km off the Angus coast in the North Sea’s Firth of Forth, the Seagreen Phase 1 Offshore Wind Farm consists of 114 turbines with a total nameplate capacity of 1,075 MW. As Scotland’s largest operational offshore wind farm, it has the capability to generate enough renewable power for 1.6 million homes (equivalent to two-thirds of all Scottish homes) and displace two million tonnes of carbon dioxide emissions annually. It plays a key role in decarbonising the UK’s power system by 2035 and helping Scotland achieve its 2045 net-zero ambition.
The transmission assets transferred include three 64-km-long subsea cables which make landfall in Carnoustie, along with 19 km of underground cabling from the coast to Tealing Substation.
In line with Ofgem’s unbundling requirements, the ownership of transmission assets must be separated from the ownership of generation assets. As a result, the project was competitively tendered in Tender Round 9 of Ofgem’s OFTO regime. Ownership of the assets will be transferred from SWEL to the OFTO set up by Equitix and Kyuden Group for a transfer value of circa £621 million.
The construction of Seagreen ranks among the largest construction projects to have ever been undertaken in Scotland, adding a £1-billion boost to the Scottish economy and supporting 4,000 jobs, according to independent analysis.
Senior lenders to the OFTO include Japan Bank for International Cooperation, Aviva Life & Pensions UK Limited, Sumitomo Mitsui Trust Bank, Limited (London Branch) and Mizuho Bank Ltd., with Equitix and Kyuden Group investing equity. The OFTO will own, operate, and maintain the transmission assets for a 24-year period under the licence granted by Ofgem.
Operis is proud to have provided financial modelling advisory services to Equitix and Kyuden Group from the commencement of the competitive tender through to financial close.
Chris Aldred, Head of Advisory at Operis: “The OFTO programme is an integral part of the UK’s energy transition. The consistency and visibility of the investment pipeline has driven strong investor interest for the ultimate benefit of the consumer. Operis has been pleased to be involved in the programme since the early tender rounds and to continue to support key clients Equitix and Kyuden.”
James Mellish, Director at Equitix: “Operis is a trusted partner to Equitix who continues to support us across multiple sectors and transactions. Operis’ financial advice and modelling capabilities played an integral role in bringing the Seagreen OFTO transaction to a successful financial close and we look forward to working with the team on Dogger Bank A OFTO and on future tender rounds.”
Kyoko Baba, Managing Director at KIC: “We were thoroughly impressed with Operis’s outstanding performance and exceptional modelling and financial expertise during the Seagreen OFTO project. Their support was crucial in achieving a successful financial close. We are excited to continue working together on future projects, with the Dogger Bank A project being our next venture.”
