Canadians make 35% annual return on former State wind farms

A group of Canadian investors led by Brookfield Renewable Partners has made a 35 per cent annual return in the space of less than three years as a result of the sale of wind-farm assets it bought from the State as part of the Republic’s Troika bailout programme.

The Quebec-run fund and institutional partners bought Bord Gáis’s 700 megawatt wind farm portfolio in 2014 for €700 million. They were part of a consortium, which also included UK power giant Centrica and ICON Infrastructure, that agreed to buy the power generation and electricity and supply assets of Bord Gáis, since renamed Ervia, for €1.12 billion in late 2013.

The sale, ultimately completed in June 2014, was carried out under the terms of the Republic’s €67.5 billion international bailout programme.

Brookfield Renewable revealed in March it had disposed of 137mw of the former Bord Gáis portfolio – capable of powering more than 70,000 homes – to UK-based investment firm Greencoat Capital for an undisclosed sum.

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However, the Canadian firm said in its first-quarter report, published this week, that the deal – comprising wind farms in Co Cork and Co Tipperary – was worth almost $350 million (€319 million), including almost $200 million of debt. The company reports figures in US dollars

“The transaction crystallised a 35 per cent compounded annual return since acquisition for /[Brookfield Renewable Partners/] shareholders,” it said.

The company’s chief executive, Sachin Shah, said on a call with analysts that the firm’s $60 million net proceeds for its 40 per cent stake in the wind farms will be recycled “into new accretive opportunities”,” he said.

Sources said that the company is currently constructing 63mw of projects in Ireland, with a further 200mw under development.

Mr Shah told analysts Brookfield Renewable will continue to “sell smaller discrete portfolios” of assets to raise capital it can invest elsewhere in the business, if buyers are willing to pay more than what Brookfield Renewable would ordinarily pay for the assets.

The Greencoat deal was carried out separately to the UK firm’s existing relationship as an advisor to ESB’s Novusmodus green energy fund.

The transaction comes months after China General Nuclear Power’s European energy arm acquired 14 Irish wind farms worth an estimated €400 million from Gaelectric. The assets in that accord comprised 10 operating wind farms and another four that are expected to be up and running by the middle of this year.