PKA makes €82m profit with sale of UK wind farm

Danish pension fund, PKA, has made a profit of €82m with the sale of its 25 per cent stake in a UK-based offshore wind farm.

The pension fund originally purchased its stake in the wind farm, known as the Burbo Bank Extension, in 2016 for around €388m through AIP Management. The 25 per cent stake has been sold to UK renewable fund manager, Greencoat for approximately €470m.

Burbo Bank Extension is a 258 MW offshore wind farm located 7km off the coast of Liverpool in the UK. Ørsted developed the wind farm and is currently operating it, while holding a 50 per cent equity stake in the asset. The wind farm was completed in 2017 currently supplies renewable electricity to approximately 230,000 UK households. Until the divestment PKA held a 25 per cent equity stake – via AIP – alongside LEGO investment arm KIRKBI (25 per cent) and Ørsted (50 per cent).

Commenting on the sale, PKA CEO, Jon Johnsen, said: “When investing in infrastructure, we do so with a long-term horizon of between 25 and 30 years. Therefore, it is unusual to sell after only six years. In this case, we received an offer that provides an attractive return for our members, which we have chosen to accept.”

In AIP’s latest fund, AIP Infrastructure II, PKA committed approximately half of the total €4bn fund. The proceeds from the sale of Burbo will be recycled into new energy transition projects via AIP.

Over 10 per cent of PKA's pension assets, corresponding to approx. €4.7bn, has been invested in climate-related projects. Johnsen said the fund will “maintain” its strategy of investing in projects that increase the amount of renewable energy being generated.

“We do this because it provides a reasonable return and is in line with our members' desire to make a positive difference to the climate. The proceeds from the sale of Burbo will be reinvested in new and more efficient climate-related projects,” Johnsen added.

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