Octopus Renewables Infrastructure Trust shares rose 1% to 107.1p in early morning trading on Friday, after the firm announced that its NAV per 1p ordinary share was 104p on 31 March 2022.
The company reported that it had fixed pricing on a significant portion of short term output as a result of higher prices in power over the last few months, with approximately 62% of revenues to be received by its current portfolio of assets in the two-year term to 31 March 2024 now fixed.
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Octopus Renewable Infrastructure Trust confirmed that 54% of revenues to be received in the ten years to 32 March 2032 were now inflation-linked.
In addition, inflation forecasts for 2022 and 2023, and power price forwards for 2022 to 2025 have climbed across the markets where the group’s portfolio of assets is based since the close of Q1 2022.
The firm highlighted that its NAV per ordinary share was calculated based on recent UK inflation consensus forecasts from the treasury, inflation forecasts published by the European Commission, fixed prices entered into since 31 March 2022 on the group’s Finnish assets, the average power market forward prices since the start of June this year, and the application of an increased discount to forward prices of 20% to 30%.
Acquisitions and ongoing projects
Octopus Renewable Infrastructure Trust announced its acquisition of the 68MW ready-to-build solar PV project Breach Solar Farm in Cambridgeshire from AGR Renewables for approximately £50 million in acquisition and estimated construction expenses.
The acquisition will also grant the company the right to construct a battery storage project which is scheduled to be built later this year, with a capacity of 50MW to 100MW.
Octopus Renewables Infrastructure Trust further acquired a 50% stake in a 12MW to 24MW ready-to-build battery storage project in Bedfordshire from Gridsource.
The transaction will be completed alongside another Octopus-managed fund and is expected to close by Q3 2022 once the lease agreement for the project site comes into effect.
The group reported a consideration of £4 million in acquisition and future construction costs.
The energy trust entered into an agreement to acquire a 7.7% stake in the Lincs Offshore Wind Farm in late April 2022, which is operated and managed Danish energy company and wind farm developer Ørsted.
Octopus Renewables Infrastructure Trust added that construction on its onshore wind farms in France, Poland and the UK were currently on track, with seven of eight turbines installed at its 24MW project in Cerisou, France. The project is scheduled for commissioning in Q3 2022.
In addition, all 12 turbines at its 39.6MW Kuslin, west Poland site have been installed, with commissioning expected in the coming weeks.
The firm said the foundation works for its 50MW wind farm in Cumberhead, Scotland had commenced, with five of 12 bases poured so far and turbine installations scheduled to begin in early autumn.
Electricity generation is reportedly set for Q4 2022 and full commercial operations are planned for Q1 2023.
“We are pleased to announce a number of developments today, including investments into ready-to build solar PV and battery projects and an update on our construction projects,” said Octopus Renewables Infrastructure Trust chairman Phil Austin.
“Our Investment Manager continues to deliver both on asset management and pipeline, actively managing our revenue streams and inflation linkage, allowing us to provide the market with new renewable generation capacity and enabling our shareholders to benefit from a diversified portfolio of impactful investments.”