Legal & General announces that it has provided close to £300m of long-term acquisition debt in support of Danish pension funds, PKA and PFA consortium’s approx £2bn purchase of 50% of Walney Extension from Ørsted (the former Dong Energy).
20 Nov 2017
Walney Extension, which is currently under construction, will be the world’s largest offshore wind farm with a capacity of 660 megawatt (MW), providing enough power for over 590,000 homes.
LGIM Real Assets was an anchor investor, structuring and providing both commercial debt and Export Credit Agency (ECA) wrapped debt on this transaction. The acquisition represents Legal & General’s first debt investment into UK offshore wind sector and its second largest infrastructure debt investment, after the £400m London Gateway Port refinancing in 2016. The deal was financed by LGIM Real Assets on behalf of their clients, including Legal & General Retirement (LGR). LGR was the principal investor for LGIM Real Assets on this transaction, providing £250M of the circa £300M of long-term acquisition debt.
The Walney Extension offshore wind farm will be located in the Irish Sea, around 19 km west of the Walney Island coast in Cumbria. Approximately £1 Million per month was contributed to the local economy during the construction of Walney I and II. It is also estimated that for the Walney Extension Project, Ørsted could support up to 185 full-time jobs annually throughout the estimated 25 year operational lifespan.
Charles-Henry Lecointe, Senior Investment Manager, LGIM Real Assets, said: “This deal represents our first offshore wind investment for LGIM clients. We have a strong appetite for future investments into this sector as well as other renewable sectors, recognising the importance the offshore wind industry can have for providing clean energy and stimulating job growth in the UK. Legal & General continues to be committed to investing in key UK infrastructure assets which will have a major impact on stimulating economic growth while ensuring long-term cash flow for pension funds.”
Kerrigan Procter, Chief Executive Officer, Legal & General Retirement, said: “Offshore wind is a growing industry in the UK, and we are very pleased to have completed our first investment with one of the most experienced and respected names in the industry. It is a great investment fit for us as it enables us to fulfil pension promises to our customers in an efficient way, whilst playing a part in driving job creation and economic growth, which is good for business as well as our customers.”
Notes to editors
Legal & General Investment Management Real Assets (LGIMRA) is a division of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages £1.28tn in assets (as at 31 December 2020), working with a range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.
LGIM Real Assets has assets under management of £36.3bn (as at 31 December 2020) and is one of the largest private markets investment managers in the UK. Investing in both debt and equity and across the risk/return spectrum, LGIM Real Assets actively invests in and manages assets across commercial, operational and residential property sectors, as well as infrastructure, real estate, corporate and alternative debt.
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Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.4 trillion in total assets under management* of which a third is international. We also provide powerful asset origination capabilities. Together, these underpin our leading retirement and protection solutions: we are a leading international player in pension risk transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
*at 31 Dec 2021