UBS Asset Management's (UBS-AM) Real Estate & Private Markets (REPM) Infrastructure business has completed the acquisition of a 49.9 perf cent stake in Phoenix Wind Repower, a portfolio of three wind farms located in Texas, USA, on behalf of its infrastructure equity strategy.
The stake has been acquired from a fund managed by Ares Management Corporation’s Infrastructure and Power strategy, which develops and owns power assets in the USA, and which retains a 50.1 per cent interest in the asset.
The three wind farms, initially commissioned between 2008 and 2012 with Clipper turbines, are currently being repowered by Vestas using best-in-class, proven technology. They are scheduled to reach commercial operation during the summer of 2020. The repowered portfolio will benefit from enhanced efficiency, as well as extended lifespans. In addition, repowering projects such as Phoenix Wind benefit from valuable historical data regarding the actual wind resource and any transmissions constraints to accurately assess risks. Once repowered, the portfolio will have a total capacity of 383 MW.
The assets interconnect into ERCOT, Texas’ main power market, which serves more than 25 million customers. ERCOT's market is underpinned by very low reserve margins and a relatively high demand growth forecast for the next decade. Based on an Environmental Protection Agency (EPA) calculation, Phoenix Wind's expected annual output would displace 1,140,000 metric tons of emissions annually, or 242,000 passenger vehicles.
This investment adds to REPM’s existing USD 8.2 billion infrastructure platform, and forms part of its USD 2.4 billion infrastructure equity strategy.
Tommaso Albanese, Head of Infrastructure, UBS Asset Management, says: “Phoenix Wind is a highly attractive investment opportunity given the project’s ability to deliver reliable income streams, its long-term environmental contribution and the expertise of our partner, Ares. This unique asset is aligned with our strategy of providing clients with access to diversified, mid-market infrastructure investments in developed economies across the globe, whilst being at the forefront of the technological advancements transforming the renewables sector.”
Keith Derman, Partner of Ares and Co-Head of Ares Infrastructure and Power, says: “We are excited to partner with UBS-AM on Phoenix Wind – another project that fits our longstanding investment strategy of applying our structuring, construction and operational expertise to add value to a critical source of renewable energy, attract high-quality partners and ultimately deliver returns for our investors. Phoenix Wind features a first-of-its-kind repowering, and we are proud that an investor of UBS’ caliber recognizes our value-add capabilities.”
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