PensionDanmark-backed fund invests €384m in offshore wind link

DolWin 3 deal is via Copenhagen Infrastructure Partners

Copenhagen Infrastructure Partners (CIP), an infrastructure fund manager backed by PensionDanmark, the €16bn Danish labour market pension fund, has struck a deal with Dutch grid operator TenneT to invest €384m in a new grid connection that links several German offshore wind parks to the mainland.

The investment gives CIP a 67% equity stake in the 900MW direct current (DC) grid connection, known as DolWin 3. TenneT will own the other 33% stake and operate the connection once it completes it in 2017. The total cost of the project is €1.9bn.

The investment in DolWin 3 will be made through a separate fund with commitment from PensionDanmark and not the Copenhagen Infrastructure I fund that was set up in 2012 and seeded with €800m by PensionDanmark.

“CIP’s investment highlights our ability to attract outside equity and solidifies our financial strength. With this transaction TenneT has a sound financial basis to execute its offshore investment plans,” TenneT chief financial officer Otto Jager said. By 2019, the state-owned Dutch firm aims to connect 13 offshore facilities to the German mainland.

“The investment complements our other investments in energy assets. With the stable German framework for the regulated infrastructure sector and TenneT being a strong and experienced operator, the investment willensure a stable return for many years to come,” added CIP Senior Partner Christian Skakkebaek, without specifying what the return would be.

Copenhagen Infrastructure has already invested €156m in a UK straw-fired biomass plant and made a $200m (€146m) mezzanine loan to build Cape Wind, the US’ first offshore wind farm.

In related news, a bank consortium consisting of the European Investment Bank (EIB), Germany’s KfW IPEX-Bank and Rabobank of the Netherlands, have provided a €350m loan to fund 26 additional turbines for the Dutch onshore wind park “Noordoostpolder.” Once the turbines are set up, Noordoostpolder will have a power capacity of 195MW, making it the Netherlands’ largest wind park according to that measure.

Staying with the EIB, industry body the Climate Bonds Initiative reports that the EU’s development bank issued another SEK900m (€101m) worth of five-year green bonds to Swedish institutional investors, taking the total outstanding of such bonds to SEK3bn. The underwriter was Swedish bank SEB.

Meanwhile, the Nordic Investment Bank (NIB) has issued €40m worth of five-year, triple ‘A’-rated paper as part of its ongoing “environmental bond” programme. The underwriter was French bank Crédit Agricole. Money raised under the programme goes to finance projects that meet the NIB’s sustainability criteria.