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Balfour Beatty announces today that it has been appointed preferred bidder for the transmission assets of the Greater Gabbard offshore wind farm project, located off the coast of Suffolk, as part of the Offshore Transmission Owners ("OFTO") regulatory regime. Balfour Beatty Capital led a consortium which also included Equitix and AMP Capital, each holding a one third equal share of the project.
Once financial close has been achieved, Balfour Beatty will jointly own the 504 MW offshore high-voltage transmission asset and will be responsible for the asset’s operation and maintenance as well as connecting the wind farm to the onshore electricity transmission system. The OFTO will carry out its responsibilities through a 20-year licence awarded by Ofgem, the Government regulator for gas and electricity markets.
This is the final and the largest project to be awarded in the first transitional round comprising nine OFTO assets. Combined with the Thanet offshore wind farm asset, Greater Gabbard gives Balfour Beatty the leading investor position in this new and growing market, with responsibility for £480 million of OFTO transmission assets with a combined transmission capacity of 804MW.
Balfour Beatty has also recently been selected by Ofgem to participate in the next round of bidding for three more OFTO assets which have a combined capital value of c£1.0 billion. Today's announcement follows the competitive tender process originally launched by Ofgem in July 2009 for offshore electricity transmission assets. Balfour Beatty's success reflects its expertise in infrastructure investment and its long-standing experience in the maintenance of offshore transmission assets. The indicative transfer value of the asset is £317 million. Balfour Beatty will invest 33.3% of the required equity in the project upon financial close, which is expected to be later in 2011.
Balfour Beatty Chief Executive, Ian Tyler, said: "Greater Gabbard is a significant step in the development of our non-PPP infrastructure investment business as well as our wider strategy of developing our delivery capability in the offshore renewables industry. It firmly places Balfour Beatty in a leading position within the fast growing and potentially very large offshore transmission markets, and provides a stable long term income stream to the Group."