SUSI Partners, through its SUSI Renewable Energy Fund II (“SREF II”), has sold the Fund’s 99 WM German wind portfolio to Qualitas Energy. The sale adds another successful exit to the SREF II track record after the sale of the 208 MW Norwegian wind farm Tonstad in early July 2024.
SREF II’s German wind portfolio consisted of seven wind farms geographically diversified across the country. The assets combine for 33 turbines and an average annual production of 213 GWh, which is enough to meet the electricity demand of approximately 63,000 German households.
As one of the earliest examples of large-scale institutional investment in renewable energy in Germany, the portfolio was a spearhead in the country’s transition to renewable energy sources, to date leading to the avoidance of approximately 770k tonnes of CO2e, which is equal to over 1.5 million return flights from Zurich ZRH to London LHR for one traveller. With 20 turbines and 61 MW capacity, the Obernwohlde wind farm, which is located approx. 50km north-east of Hamburg, accounted for the largest production share and was at the time of the acquisition by SREF II in 2016 the largest onshore wind farm in Germany.
Acquisition & Structuring
SUSI acquired the seven wind farms through individual transactions between 2015 and 2017 and secured debt financing at attractive terms while retaining prudent leverage levels. With all assets operating on a merchant basis but benefitting from feed-in tariffs that secured a guaranteed floor price, the portfolio was structured to provide robust downside protection while retaining significant upside potential and inflation protection in times of elevated power prices above the tariff level. In addition, the geographical distribution and technological heterogeneity of the seven wind farms further contributed to the portfolio’s ability to thrive in diverse market conditions.
Diligent Asset Management & Successful Exit
During SREF II’s ownership of the portfolio, the SUSI team laid the groundwork for a successful exit by applying its active portfolio management approach and leveraging its in-house technical, commercial, and ESG expertise.
SUSI put in place and oversaw an efficient contractual setup, managing separate technical and commercial management (“TCM”) as well as operations and maintenance (“O&M”) contracts with four different providers for each service respectively. While this required a more proactive coordination approach, it saved on cost and diversified supplier risks. Close cooperation with turbine suppliers and TCMs allowed the SUSI team to quickly identify and mitigate emerging risks while continuously assessing value-add opportunities. For example, SUSI coordinated harvesting activities of local landowners to allow for the protection of wildlife while minimising the aggregate downtime resulting from the required shut-down of turbines.
A concerted effort was put into an extension of the assets’ design life from originally 20 to up to 30-35 years. SUSI initiated a foundation design check, commissioned estimates for parts degradation as well as expected operational and capital expenditures, and managed to maintain good relationships with landowners to facilitate lease extensions. In addition, SUSI laid the groundwork for potential asset expansions through repowering and co-location with battery energy storage systems and solar PV assets that would allow subsequent owners to achieve a balanced generation profile and capitalise on spot-price volatility.
SUSI’s diligent management of these assets over close to a decade will provide the buyer with a well-performing, resilient, and SFDR 9-aligned wind portfolio that will continue to make a substantial contribution to Germany’s energy transition over the coming decades while securing an attractive return on investment for SUSI’s institutional clients and their beneficiaries.
