SUSI Partners sells German wind power portfolio

SREF II's German wind power portfolio consisted of seven onshore wind farms spread across Germany. Together, the turbines have 33 turbines and an average annual production of 213 GWh, which is enough to cover the electricity needs of around 63,000 German households.

As one of the first examples of the extensive involvement of institutional investors in the expansion of renewable energies in Germany, the portfolio played an important role in the country's transition to renewable energy sources. To date, the portfolio has resulted in the avoidance of approximately 770,000 tonnes of CO₂, equivalent to more than 1.5 million round-trip flights from Zurich ZRH to London LHR for one traveller. The Obernwohlde wind farm, which is located about 50 km northeast of Hamburg, has the largest production share with 20 turbines and 61 MW of capacity and was the largest onshore wind farm in Germany at the time of its takeover by SREF II in 2016.

SUSI acquired the seven wind farms through individual transactions between 2015 and 2017 and secured attractive debt financing while maintaining a conservative financing structure. All plants sell electricity on the market, but benefit from feed-in tariffs that guarantee an attractive minimum price. In this way, the plants are hedged against low electricity prices and at the same time offer considerable potential for additional income and inflation protection in times of high electricity prices above the tariff level. In addition, the geographical distribution and technological heterogeneity of the seven wind farms contributed to the portfolio's ability to hold its own under a wide range of market conditions.

During the ownership of SREF II, SUSI laid the foundation for a successful sale of the portfolio thanks to an active portfolio management approach and in-house technical, commercial and ESG expertise.

SUSI concluded and managed separate contracts for technical and commercial management ("TCM") and operation and maintenance ("O&M") with four different providers per service. On the one hand, this required proactive coordination, but it saved costs and diversified supplier risks. The close cooperation with the turbine suppliers and TCMs also enabled the SUSI team to quickly identify risks and actively support problem solving, while continuously pursuing value creation opportunities. For example, SUSI coordinated the harvesting activities of the local landowners to both ensure the protection of wildlife and at the same time minimise the overall downtime due to the need to shut down the turbines.

Concerted efforts have been made to extend the life of the equipment from the original 20 years to up to 30-35 years. SUSI arranged for a review of the foundation design, commissioned estimates for the wear and tear of parts and the expected operating and investment costs, and managed to maintain good relationships with the landowners to enable lease extensions. In addition, SUSI laid the foundation for potential expansion projects through repowering, i.e. replacing turbines with larger and more powerful models, and expanding plants with battery storage systems and photovoltaic systems. Such projects make it possible to achieve an optimized generation profile and to better respond to fluctuations in electricity prices.

SUSI's dedicated management of these turbines over a period of almost a decade will provide the buyer with a powerful, stable and SFDR 9 compliant wind portfolio. The portfolio will continue to make a significant contribution to the energy transition in Germany in the coming decades and has secured an attractive return for SUSI's institutional clients and their beneficiaries.