Australia’s Macquarie Capital acquires $850-mn stake in German wind farm

Macquarie Capital, the investment arm of Australian financial services giant Macquarie Group, is acquiring a 49.89-per cent stake in a German offshore wind farm for approximately €720 million ($850 million), making it Macquarie's biggest investment in the renewable energy sector.

Macquarie Capital will acquire the stake from Energie Baden-Württemberg AG (EnBW), one of the largest energy suppliers in Europe, while EnBW will retain the remaining interest in the wind farm.

EnBW's 288-megawatt (MW) Baltic 2 wind farm is under construction in the German Baltic Sea, about 32 km north of Ruegen Island.

The wind farm will constitute a total of 80 Siemens wind turbines of 3.6 MW each in water depths of 23 metres to 44 metres, with 34 of them already installed. The project completion as well as financial closing of the deal, is expected in June 2015.

Having announced plans to phase out all its nuclear reactors by 2022, Germany is a world leader in alternative energy sources and Macquarie Capital is aiming to benefit from this standing.

Macquarie Capital Europe's head of infrastructure, utilities and renewables, Mark Dooley said: ''We are particularly excited about this transaction as it signifies what we hope will be the first of many investments in offshore wind.''

''Given the strong regulatory renewable energy regime, we see Germany as a key market for this type of investment going forward,'' Dooey further stated.

Thomas Kusterer, chief financial officer, EnBW said ''EnBW has now successfully implemented its second participation model in the area of offshore wind energy.''

Macquarie Capital, which has a strong balance sheet, is an active investor across Europe both directly and through its clients.

It has already agreed to invest around $226 million into renewable energy investment company Low Carbon to fund the construction of up to 300 MW of UK solar projects and part financing of Covanta Energy's $590 million waste to energy project in Dublin, Ireland.

Macquarie intends to fund the transaction through a combination of equity and debt financing from several commercial banks. The company said that it structured and arranged the debt package as a large tranche of holding company debt.

Some analysts are surprised, why Macquarie has not used cash from its infrastructure funds for the acquisition.

Macquarie Capital is the advisory, capital markets and principal investment arm of Macquarie Group. It has invested over $2 billion in 100 deals globally across a range of sectors since 2008.

Karlsruhe-based EnBW had started its first commercial offshore wind farm Baltic 1 in 2010, which was also offered as a participation model. A total of 19 municipal utilities have a combined 49.9-per cent stake in the farm.

In a separate statement, EnBW said that the company plans to invest over €7 billion to restructure its activities targeting 2020, and half of the amount is earmarked for wind energy.