Hong Kong investor buys UK wind farms for £350m

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A company controlled by the family of Li Ka-shing, Hong Kong’s richest man, has agreed to buy a portfolio of British wind farms for £350m in the latest expansion of its utilities arm.

Under the agreement, a consortium led by CK Infrastructure will acquire 32 onshore wind farms from Aviva Investors.

The assets, with a nameplate capacity of 175 megawatts, include the 18MW Den Brook wind farm in Devon and the 25MW Minnygap project near Dumfries in Scotland.

The deal is evidence of continued growth in the UK’s interest in existing renewable energy assets, despite the introduction of a windfall profits tax following Russia’s large-scale invasion of Ukraine.

In the UK, the introduction of a so-called generator levy was announced in autumn 2022, which will impose a 45 percent fee on electricity sold at an average price of more than £75 per megawatt-hour.

Renewable energy generators such as wind farms were included in the tax because their revenues increased after the Russian invasion but there was no increase in their input costs, unlike coal- or gas-fired generators.

CKI said the assets would provide “immediate returns, stable cash flows and recurring profit contributions”. The Hong Kong-listed company is one of the UK’s largest gas, electricity and water distributors.

The company said it expects the transaction to close in late September.

Earlier this year, CKI bought Phoenix Energy, Northern Ireland’s main gas distribution network, for £757m. It also spent £90.8m to acquire UU Solar, which owns about 70 smaller renewable energy projects.

The Li family entered the UK utilities market through a series of acquisitions and investments over the past 20 years.

In 2010, CKI bought UK Power Networks, the main electricity distributor in London and the south-east of England, for £5.5 billion and also has significant stakes in Northumbrian Water and Northern Gas Networks.

The company said that last year the UK accounted for the largest share of CKI’s global profits, at 36%, while in 2022 it was 31%.

Victor Li, CKI chairman and Li Ka-shing’s elder son, told shareholders in May that the UK acquisitions should deliver recurring profits and steady cash flow.

The company said last month it was considering a secondary listing on the London Stock Exchange to “help build the company’s profile” and benefit its “geographically diverse” shareholder base.

CKI also controls gas and power assets in Canada, Australia and New Zealand.