TNB bolsters overseas RE portfolio
It buys two British onshore wind turbine businesses
PETALING JAYA: Tenaga Nasional Bhd’s (TNB) move to acquire two British onshore wind turbine businesses will further bolster the power producer’s international renewable energy (RE) portfolio.
In line with its aim to expand its RE business as well as enlarging its footprint internationally, TNB’s wholly owned subsidiary, Tenaga Wind Ventures UK Ltd, has completed the acquisition of an 80% stake in GVO Wind Ltd and Bluemerang Capital Ltd, respectively, for £77.37mil (RM418mil).
The national utility company has entered into a share purchase agreement with an individual, Georg von Opel, for the 80% ownership in GVO Wind.
Similarly, TNB has also inked an agreement to acquire an 80% stake in Bluemerang Capital from Tanzanite BV and Catalin Breaban, the co-founder and a shareholder of Bluemerang Capital.
Upon completion of the acquisitions, von Opel’s stake in GVO Wind will be diluted to 20%, while Tanzanite BV will hold a 20% share in Bluemerang Capital.
The Main Market-listed TNB’s total international combined net installed capacity will rise to 280 megawatts (MW), given the addition of approximately 26.1MW capacity from GVO Wind and Bluemerang Capital. Both RE companies own the largest feed-in tariff (FiT) wind portfolio in Britain, comprising 53 operational onshore medium wind turbines.
TNB said in a filing with Bursa Malaysia that the acquisition was part of its Five-Year International Expansion Roadmap.
It said the acquisition of an operational wind turbine portfolio was a low-risk investment, as there was no exposure to planning and construction risk.
It said acquiring the onshore wind assets was also in line with TNB’s strategy on RE expansion under the Reimagining Tenaga strategy to position TNB as one of the top global utility players by 2025.
“TNB intends to grow its RE portfolio to an optimal size via greenfield development or acquiring other RE portfolio of similar or complementary technology.
“TNB also intends to develop its human capital as part of this acquisition by accelerating the training and exposure of TNB personnel in RE operations, particularly in wind turbine operations.
“Operating medium-sized wind turbines in a developed market will reduce the risks TNB faces in its learning curve to build a compelling RE track record,” it stated.
GVO Wind and Bluemerang Capital’s wind portfolio consists of young assets, with an average age of 2.5 years and an estimated useful life of over 25 years.
The portfolio has the support of a 20-year British government-backed FiT renewable support mechanism and offers attractive financial returns which are earnings-accretive from year one.
At least 97% of the portfolio’s revenue was contracted through the British government-backed renewable FiT support mechanism and guaranteed export tariff.
The acquisition of both GVO Wind and Bluemerang Capital was funded through a combination of TNB’s internally generated funds and borrowings.
TNB pointed out that the acquisition is not expected to have a material effect on the company’s net assets and gearing.
This is TNB’s second acquisition in Britain after last year’s acquisition of the Vortex Solar photovoltaic assets, which is the UK’s third-largest solar power business comprising 24 solar photovoltaic farms.
The stock closed four sen lower at RM15.70 yesterday, with about 3.05 million shares changing hands.