EDF in talks to sell U.K. wind energy stake

EDF, the French energy group, is in talks to sell a 49 per cent stake in a portfolio of its UK wind farms in a deal that could raise up to £600m.

EDF Energy Renewables, the group’s UK renewables business, owns 23 onshore wind farms and one offshore wind farm off the north-east coast of England that generate about 550MW of electricity. Analysts estimated the disposal of a 49 per cent stake in these projects could be valued at about £600m.

“It’s a sizeable and diversified portfolio,” said one analyst, who declined to be named. “The opportunity to partner with EDF is also likely to be attractive.”

The company has hired Barclays to advise on the sale. Binding offers for the portfolio are due towards the end of May, according to people with knowledge of the sales process.

Greencoat UK Wind, a listed investment fund, and a consortium involving Dalmore Capital are seen as potential bidders, said these people, alongside a number of pension funds. EDF and Barclays declined to comment.

The disposal would be the largest in a series of transactions by EDF’s renewables business to reinvest in expanding its portfolio in other parts of the industry. In November it sold an 80 per cent stake in five of its onshore farms to Greencoat UK Wind. It continues to run the sites and provide maintenance and operational services. Together the wind farms have a combined output of close to 100MW.

At the time, Matthieu Hue, chief executive of EDF Energy Renewables, said the deal was part of EDF group’s strategy “to allow us to invest in other UK renewable projects”.

EDF earlier this month bought a major offshore wind project in Scotland from developer Mainstream Renewable Power in a hotly contested deal valued at more than €500m. The construction of the project is expected to cost a further £1.8bn to complete, and the wind farm will be capable of generating 450MW of power when finished, putting it among the country’s largest offshore projects.

Wind investments in the UK, particularly offshore, have been on the rise in recent years, as the UK’s installed wind capacity has surged and investors have come to see wind farms as low-risk assets. Last year UK wind investment deals totalled more than $4.7bn, up from to $1.6bn the previous year, according to figures from Dealogic.