Brookfield swoops for UK wind farms in $1bn deal

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Canadian investment firm Brookfield is buying one of the UK’s largest renewable developers, in a boost for the country’s onshore wind industry after recent setbacks.

Brookfield will acquire Durham-based Banks Renewables in a deal worth almost $1bn, according to people with knowledge of the details. 

Banks Renewables, part of the family-owned Banks Group, owns operational onshore wind farms in northern England and Scotland, and also has a large portfolio of onshore wind, solar and battery assets in development. 

The transaction comes as other developers have warned of a challenging environment for wind power because of rising costs, with developers Vattenfall and Community Windpower recently halting an offshore and an onshore project respectively in the UK.

Sebastian Perl, the Brookfield vice-president who led the transaction, said he thought there was “generally a very positive outlook” for renewables in the UK and that cost pressures for onshore wind were short-term. 

“We have a long-term view as a long-term investor,” he said. “There might be some challenges along the road but you have that with every market, every business. It hasn’t changed our view on the market or the investment environment in the UK.”

He added that he did not see the UK government’s windfall tax on low-carbon electricity generators, singled out by Community Windpower as one reason for halting its development, as a “showstopper”. 

The deal is being done by Brookfield’s second Global Transition Fund, which started raising money this year to invest in projects advancing the shift away from fossil fuels. 

Its first Global Transition Fund raised $15bn last year and its investments include buying nuclear fuel and reactor developer Westinghouse in partnership with Cameco, and leading a takeover of Australian energy group Origin Energy.

Brookfield is already present in the UK’s onshore wind market, having kept hold of some farms in development after selling a handful of operating wind farms in 2021 to Danish company Ørsted.

It is also currently developing a 60MW wind farm in Scotland and has agreed that the electricity will be sold to real estate developer Canary Wharf Group.

Banks Renewables’ total portfolio comprises just over 4GW: about 300MW of operational wind farms, 300MW of onshore wind farms, solar and battery projects that have received planning permission, and another 3.5GW in the pipeline.

Most of its onshore wind pipeline is in Scotland, reducing its exposure to more restrictive planning rules in England. The UK government last month eased rules that in effect banned new onshore wind farms in England, but industry experts have warned that the changes may not go far enough to bring forward new developments. 

The Banks Group, which was founded in 1976, also develops property in the north of England and Scotland and it mined coal for more than 40 years until 2020. Harry Banks, chair and founder, said Brookfield’s “greater resources” would help develop the renewables portfolio. 

“It will be good for Brookfield because they are acquiring a renewables business with a proven record and a capability to take the business forward,” he added. The deal is due to be completed by the end of November.

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