Hopes that sale of Coillte’s wind farm assets could exceed €125 million

Coillte is hoping that the sale of its wind farm assets could exceed €125 million, according to an announcement made by the company last week.

Last October, Coillte revealed that it would explore the potential sale of its successfully-commissioned wind assets as part of an “ambitious strategy” to develop in excess of 1,000MW of future renewable energy projects.

Towards the end of last week, the company confirmed that it has commenced a formal sales process, which will seek to maximise the value of its investment in its four operating wind farms.

The sales process will explore investor interest in acquiring Coillte’s 50% stake in each of its joint venture wind farms at Raheenleagh (Co. Wexford), Cloosh Valley (Co. Galway) and Castlepook (Co. Cork) as well as a 25% stake in Sliabh Bawn (Co. Roscommon) – in total representing a net operating capacity of 104MW on an equity basis.

These wind farms were co-developed with ESB, SSE and Bord Na Mona.

Sales process

Coillte has invested €25 million of equity in these operating wind farms over the last four years and expects that – in the “current strong market” – a value in excess of €125 million will be achieved.

In addition to achieving “significant value” from the sale, as the wind farms are located on Coillte lands, the company will continue to receive long-term land lease income throughout their operational lives, Coillte added.

As part of the current sales process, Coillte will also seek interest from prospective investors for the potential future acquisition of two wind farm projects currently in final planning review that have the potential to produce 90MW of power (67.5MW on a net equity basis).

This announcement marks a “critical milestone” for Coillte, the company’s chief executive, Fergal Leamy, said.

Commenting on the announcement, he added: “Whether we achieve our sales price expectations or ultimately decide to retain an ongoing dividend flow from these assets, these wind farms are an impressive set of projects, delivering clean energy, demonstrable economic value and real value to the local communities.

The fact that we have realised assets with an equity investment of €25 million that may trade for a value greater than €125 million illustrates the potential value we can create from every hectare of land we own to ultimately deliver enhanced value for our shareholder, the state.

“In addition to the sales process we are now launching, later in the year we expect to announce details of how we plan to develop in excess of 1,000 MW of renewable energy generating capacity over the next 10 years across a pipeline of 25 projects we have identified on the Coillte estate.”

Reinvestment

The company intends to reinvest the capital achieved from a successful sale of the four operating wind farms back into the business – with a focus on its core forestry activities, co-funding of new wind development opportunities and other strategic options.

Looking to the future, Coillte plans to develop “an exciting pipeline” of future renewable energy projects with a strategic partner, while retaining ownership of the underlying land.

Its estate has the potential to unlock as much as 1,000MW of renewable energy generating capacity by 2030, representing approximately 33% of the future renewable energy that will be needed to power homes and businesses across Ireland, Coillte concluded.