Li Ka-shing’s infrastructure unit acquires 32 UK wind farms for US$448.5 million

Posted by Admin August 14, 2024 Infra

Li Ka-shing’s infrastructure unit acquires 32 UK wind farms for US8.5 million

CK Infrastructure Holdings (CKI), part of Hong Kong tycoon Li Ka-shing’s business empire, continues to snap up utility assets overseas with the acquisition of 32 onshore wind farms in the UK, its third such purchase this year.

The consortium led by Li’s infrastructure and energy flagship entered into an agreement to acquire a portfolio of operating onshore wind farms in the UK from Aviva Investors for around £350 million (US$448.5 million), according to a statement on Tuesday morning. The transaction is expected to close in late September.

The consortium comprises CKI and Li’s property flagship CK Asset Holdings, which will both hold 40 per cent of the interests in the portfolio, and Li’s international energy utility investment unit, Power Asset Holdings, which will hold 20 per cent.

“This acquisition bolsters CKI’s position in meeting the challenges of climate change by driving the sustainability transition, adding to CKI’s existing sustainability initiatives ranging from renewable gas generation and distribution to waste management and recycling, to smart heating, [and] energy- and water-consumption tracking devices,” the statement said.

The portfolio comprises 32 wind farms located in England, Scotland and Wales, with a total of 175 megawatts (MW) in installed capacity.

The portfolio will provide immediate returns, stable cash flow and recurring profit, according to CKI. Revenue will be generated from government subsidies which are inflation-linked, as well as from power purchase agreements and from selling power to the market.

This is the third infrastructure investment made by CKI this year.

On April 24, CKI formed a consortium with CK Asset and Power Assets to acquire Lionrai Investments No. 1, which owns 100 per cent of natural gas network company Phoenix Energy, from NatWest Group Pension Fund and Utilities Trust of Australia for £757 million.

Phoenix Energy is one of three gas distribution network operators in Northern Ireland. Its network covers nearly half of the local population, including Greater Belfast, and accounts for 78 per cent of gas connections in Northern Ireland.

Two weeks later in May, CKI bought UU Solar, which owns and operates 70 renewable power-generation assets in the UK for £90.8 million.

Flags outside the Cheung Kong Center building in Central. Photo: Dickson Lee

The UU Solar assets include 65 solar-power projects, four onshore wind farms and one hydropower plant, with combined installed capacity of 68.7MW. Most of the electricity output is supplied to water and sewerage firm United Utilities Water, with the remainder exported to the power grid.

Europe and Australia account for most of CKI’s profit. Profit contribution for Hong Kong and mainland China fell 40 per cent in 2023 to HK$117 million, the company said in its annual report in March, citing poor performance of its infrastructure materials manufacturing business amid a “major decline” in construction activity in mainland China.

CKI owns a stake in Power Assets, and net profit derived from that stake grew 6.4 per cent year on year to HK$2.16 billion in 2023.