LONDON -(Dow Jones)- U.K. utility Centrica PLC (CNA.LN) said Wednesday it is investing GBP725 million to build a new offshore wind farm off the east coast of England - the second major project to benefit from the U.K. government's increase in the support mechanism for offshore wind earlier this year.
The 270 megawatt Lincs offshore wind project will be situated eight kilometers off the coast of Skegness and is due to start generating power towards the end of 2012. The Lincs investment is part of Centrica's overall plan to spend over GBP15 billion to secure new power and gas by 2020.
"The (U.K.) government's enhanced financial framework for offshore wind has been fundamental in improving the overall project economics of this development," said Centrical Chief Executive Sam Laidlaw.
Centrica also announced it has agreed the sale of a 50% stake in its Lynn, Inner Dowsing and Glens of Foudland wind farms to U.S.-based investment management company Trust Company of the West for GBP84 million. The U.K. utility has also entered into agreements to raise approximately GBP340 million of non-recourse project finance facilities from a consortium of banks for these assets.
The transactions value the three wind farms at around GBP460 million in aggregate. Profit on disposal of the 50% stake will be around GBP50 million.
Company website: http://www.centrica.com
-By Selina Williams, Dow Jones Newswires +44 207 842 9262; selina.williams@dowjones.com