The renewable energy fund KGAL ESPF 4 has sold a Polish onshore wind portfolio with a total capacity of around 75 megawatts to Octopus Energy Generation. The transaction includes the three operating wind farms Krasin, Ciekocinko and Rywald as well as connected development pipelines. The turbines are located in windy regions in northern Poland and feed into the grid with long-term electricity tariffs. The Polish wind portfolio is another exit from ESPF 4 with a yield well above the hurdle rate.
In 2019, KGAL was one of the first international asset managers in the Polish wind market and consistently took advantage of the favourable conditions at the time. KGAL had gradually acquired the portfolio now sold in 2020 and 2021 in ready-to-build status and was responsible for it from the construction phase to operation.
A central value driver of the wind farms is the long-term contractually secured revenues. KGAL had negotiated inflation-indexed electricity supply contracts (PPAs) for Krasin and Rywald in 2023, while Ciekocinko sells its electricity at a state-guaranteed auction rate (CfD), thus ensuring predictable revenues.
"The cash flows from PPAs and CfDs ensure a high degree of predictability of revenues. They were a key reason for the lively investor interest in this portfolio," says Sebastian Blum, Senior Transaction Manager Sustainable Infrastructure at KGAL. "In addition, there is the high technical quality of the wind farms, which have been running reliably and without interruptions for years."
At the same time, this transaction confirms the buy-build-sell strategy of ESPF 4. The Article 8 fund focuses on early acquisitions of projects in the value chain, their further development up to the operational phase and subsequent sale. This buy-build-sell strategy has also been successfully implemented in the successor fund ESPF 5 since 2020 and is being implemented in the new ESPF 8.
KGAL was advised on the transaction by Erste Group and UniCredit (M&A), DWF Poland (Legal), Innside Tax (Tax) and Wind Prospect (Technical).
