Cross border renewables investment in Curraghderrig

With the increased presence of and global pressure for renewables, as well as a change in perception on the risk inherent in renewables as a form of long term investment, it is becoming increasingly common to see cross borders renewable investments.

This summer, Scottish Equity Partners (SEP) has provided project finance to fund the construction of the €8.7 million, 4.6MW Curraghderrig wind farm in the Republic of Ireland. Developed as a project by Rengen Power the investment was made through SEP's Environmental Capital Fund (ECF), which is targeted at infrastructure projects in the energy sector.

Located on the south west coast of Ireland in Kerry, Curraghderrig will operate two 2.3MW Enercon E-70 turbines, each with a hub height of 64 metres.Ground work and turbine installations have now been completed on the site, with the turbines due to be operational by September 2017. Enercon is delivering the construction of the turbines under an engineering, procurement and construction (EPC) contract, after which it will assume operational and maintenance responsibilities for the wind farm under a comprehensive 15 year contract.  

It is estimated that the windfarm at Curraghderrig will generate sufficient renewable energy to power over 3,100 homes. If successful this could eliminate the equivalent of 5,600 tonnes of CO2 each year or the emissions of about 2,100 cars, which would strategically assist in Ireland being able to meet its binding 2020 EU renewables targets.

Peter Bachmann, a Director in SEP’s infrastructure team said:

“Ireland is a key market for the development of new wind assets, particularly in light of the supportive mechanisms in place under the Government’s REFIT system. The transaction represents ECF’s first investment in Ireland and the start of a development partnership with Rengen designed to grow ECF’s portfolio of high performing wind assets across both Ireland and the UK. At Curraghderrig we will have market leading wind turbines in a proven high wind location.”

ECF has provided equity funding for the project alongside a long term senior debt facility from Bank of Ireland. Rengen, a leading specialist renewables development and management business, will provide long-term management services to the project, as well as retaining an economic interest in its success. Additionally Irish utility company Vayu has entered a power purchase agreement to acquire all the electricity produced at Curraghderrig.

This project exemplifies how collaboration between different parties can facilitate progress within renewables.

Michael Lauhoff, Head of Business Banking Growth commented that “Bank of Ireland is delighted to support Scottish Equity Partners  by providing long term senior debt to enable the construction of their first wind farm investment in Ireland. Through our dedicated project finance teams, Bank of Ireland has participated in the financing of over 600 megawatts of Irish on shore wind farms – enough to power c400,000 homes with renewable electricity”.