Active Portfolio

Arena Series IV

This is an opportunity to invest in and develop wind energy, a sustainable form of energy that is environmentally friendly and in plentiful supply.

About this bond

Wind energy is one of the most promising forms of renewable energy, with Scotland, the North of England and Northern Ireland having some of the best conditions for wind energy, both on- and off-shore. Arena Capital Partners currently owns and operates 75 wind turbines with additional acquisitions targeted. This investment consists of two wind turbines in Northern Ireland Craighill Road, Tyrone and Errigal Road, Tyrone and one in Northbankend, Lanarkshire, Scotland.

The Opportunity

Both Northern Ireland and Scotland have favourable economic environments for wind energy development and investment. There have been well-established government incentive schemes in Northern Ireland since 2005. The three largest areas for onshore wind in Scotland are the Highlands, South Lanarkshire, and the Scottish Borders; all three areas benefit from significant supply chain benefits (Source: Renewable UK).

The turbines are fully built out and commissioned with 15 year power purchase agreements with Power Northern Ireland and Opus Energy Renewables Limited. All three turbines sites are fitted with Endurance X-35 225kw turbines, which are  designed to maximise output and generate high energy returns. The Asset Manager Arena Capital Partners Limited are an experienced team with over 50 years’ combined private equity, corporate, personal finance and operating experience.

Investment Profile

Investment Start Date: December 2017

Target Exit Date: June 2022

Investment Size: €5 million

Asset Managers: Arena Capital Partners Limited

Investment Highlights

Exposure to renewable wind energy
4 year 6 month investment term
6.25% per annum
Exposure to renewable energy wind sector
Security: first legal charge over underlying assets
Maximum overall return of 28.125%

At the recent annual update meeting, it was noted that output performance was lower than expectations, which was advised by promoters to have been impacted by mechanical / gearbox issues and below average wind conditions. The promoters have taken the appropriate corrective action to address the mechanical issues and advise that a recent survey indicates that issue has now been identified and addressed across the entire portfolio.

The promoters remain very committed to the assets and have funded all repair costs from group portfolio resources. They have also advised that these resources can be used to support coupon payments if necessary.

Market demand is currently very strong for renewable energy portfolios such as the Arena fleet. This has been directly confirmed to BlackBee through an international advisory company that has specialty in renewable energy asset sales. 

The characteristics of the Arena fleet (geographic distribution, high level of ROC income) are advised to be particularly attractive. The promoters are thus seeking to capitalise on this demand and have advised that they are currently exploring options for progressing a sale in the near term which they are satisfied will achieve a value to redeem all associated debts.

We are in continuous communication with the promoters and they advise that wind conditions were good for Q1 2020 resulting in strong power generation. With arrival of Covid-19, they have put contingency plans in place to ensure that the operation and maintenance of all turbines can be delivered when required. Power purchase agreements remain in place and are being paid fully up to date with no major fluctuation in pricing advised.

Coupons are paid up to date.

At recent annual update meeting, it was noted that output performance was lower than expectations which was advised by Promoters to have been impacted by mechanical / gearbox issues and below average wind conditions. The Promoters have taken the appropriate corrective action to address the mechanical issues and advise that recent survey indicates that issue has now been identified and addressed across the entire portfolio.

 

The Promoters remain very committed to the assets and have funded all repair costs from group portfolio resources. They have also advised that these resources can be used to support coupon payments if necessary.

 

Market demand is currently very strong for renewable energy portfolios such as the Arena fleet. This has been directly confirmed to BlackBee through an international advisory company which has specialty in renewable energy asset sales. 

The characteristics of the Arena fleet (geographic distribution, high level of ROC income) are advised to be
particularly attractive. The Promoters are thus seeking to capitalize on this demand and have advised that they are currently exploring options for progressing a sale in the near term which they are satisfied will achieve a value to redeem all associated debts.

 

We are in continuous communication with the Promoters and they advise that wind conditions were good for Q1 2020 resulting in strong power generation. With arrival of Covid 19, they have put contingency plans in place to ensure that operations & maintenance of all turbines can be delivered when required. Power purchase agreements remain in place
and are being paid fully up to date with no major fluctuation in pricing advised.

 

Coupons are paid up to date.

Want to know more?

Investors: For information about how to invest contact your Financial Advisor.

Financial Advisors: Please contact @blackbee.ie or call on 021 123 4567