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A car managed by the household of Li Ka-shing, Hong Kong’s richest man, has agreed to purchase a portfolio of UK wind farms for £350mn within the newest growth of its utility arm.
Under the settlement, a consortium led by CK Infrastructure will purchase 32 onshore wind farms from Aviva Investors.
CKI additionally stated on Wednesday it had utilized for a secondary itemizing on the London Stock Exchange, with admission anticipated on Monday.
The wind farm deal reveals the continuing attraction of established renewable energy technology belongings within the UK, regardless of a windfall tax imposed after Russia’s full-scale invasion of Ukraine, whereas CK’s secondary itemizing is an indication of confidence in London’s inventory market.
The Financial Conduct Authority, the UK monetary regulator, in July introduced a big overhaul of the nation’s itemizing regime as a part of efforts to draw firms to London.
The UK wind farm belongings, with a nameplate capability of 175 megawatts, embody the 18MW Den Brook wind farm in Devon and the 25MW Minnygap undertaking close to Dumfries in Scotland.
The UK introduced its so-called Electricity Generator Levy within the autumn of 2022, imposing a forty five per cent cost on electrical energy offered at a mean worth of greater than £75 per megawatt hour.
Renewable turbines comparable to wind farms had been included within the levy as a result of their revenues jumped after the Russian invasion however there was no improve of their enter prices, in contrast to coal or gas turbines.
CKI stated the belongings would offer “immediate returns, stable cash flows and recurring profit contributions”. The Hong Kong-listed firm is likely one of the greatest gas, electrical energy and water distributors within the UK.
The transaction was anticipated to finish in late September, the corporate stated.
Earlier this 12 months, CKI purchased Phoenix Energy, Northern Ireland’s principal gas distribution community, for £757mn. It additionally spent £90.8mn to amass UU Solar, which owns about 70 smaller renewable technology tasks.
CKI had a long-established presence within the UK and most well-liked to “invest in markets that they are familiar with”, stated Lorraine Tan, director of Asia fairness analysis at Morningstar.
The Li household has ventured into the UK utility market with a sequence of acquisitions and investments over the previous 20 years.
CKI purchased UK Power Networks, the primary electrical energy distributor in London and the south-east of England for £5.5bn in 2010, and likewise owns substantial stakes in Northumbrian Water and Northern Gas Networks.
The UK accounted for the biggest share of CKI’s international earnings at 40 per cent within the first six months of this 12 months, up from 36 per cent within the first half of 2023, the corporate stated.
Victor Li, chair of CKI and the elder son of Li Ka-shing, stated the corporate was in an “advantageous position” to discover new acquisitions given its “solid” financials.
CKI additionally controls gas and electrical energy belongings in Canada, Australia and New Zealand.