January 28, 2004

RWE Innogy signs £400 million wind power deal

RWE Innogy1 today signed a groundbreaking deal to secure further funds for the development of its wind energy business.

Andrew Duff, Chief Executive Officer of RWE Innogy said, "Wind power is a vital part of our portfolio and the increased leverage this brings to our leading development capabilities and balance sheet strength will ensure that we remain at the forefront of this growing market. It means we can continue playing a major part in meeting the Governments' environmental targets for renewable energy development. We look forward to working with our new financial partners".

RWE Innogy through its wind energy subsidiary, National Wind Power Ltd2, is leading both onshore and offshore wind energy developments in the UK and is currently commissioning, North Hoyle3, the UK's first major offshore wind farm.

Under the terms of the agreement three partners: RWE Innogy, Englefield Capital LLP4, and the First Islamic Investment Bank E.C. (F.I.I.B)5 through its investment vehicles arranged by its subsidiary, Crescent Capital Investments (Europe) Limited6, will take one third each of the share capital of the investment fund, Zephyr Investments Ltd, established in April 2003.

Zephyr Investments is the 100% shareholder in Beaufort Wind Ltd which owns RWE Innogy's existing operating wind assets. Wind developments completed over the next 3 years, up to an estimated portfolio total of 430 megawatts (MW), will continue to be developed, constructed and managed by National Wind Power, but will be sold to Beaufort Wind after completion. The deal will include a £300 million debt facility.

Edmund Lazarus, a founding partner of Englefield Capital, and Asim Zafar, a founding partner of F.I.I.B. said, "We are delighted to be working together in partnership with RWE Innogy on a truly innovative deal for the renewables industry which will provide leadership for Englefield and F.I.I.B. in a new area for private equity. When completed, this portfolio will make a major contribution to the clean energy objectives of the UK Government".

RWE Innogy's retail subsidiary, npower7, will purchase power and Renewable Obligation Certificates from Beaufort Wind Ltd under long term purchase contracts as part of its strategy to meet the UK Government's Renewable Obligation targets.

Beaufort Wind is the first UK portfolio financing of wind farms operating under the Renewables Obligation Certificate market-led mechanism. It is also the first in the UK to fund an offshore development, North Hoyle, via the financial markets in this way.

RWE Innogy began seeking new equity partners in 2003, and has been working for several months with its chosen two partners to agree this innovative deal structure.

RWE Innogy was advised on both the debt and equity raising by RBC Capital Markets8. The equity investors, Englefield Capital LLP and the First Islamic Investment Bank were advised by Augusta & Co9 and ERGO Finance LLP10.

Notes to Editors

  1. RWE Innogy

    RWE Innogy is a leading integrated UK energy business. It generates electricity and supplies gas and electricity through its retail business npower. RWE Innogy operate and manage a flexible portfolio of power stations and is a market leader in renewable energy development.

    Website: www.rweinnogy.com

  2. National Wind Power

    National Wind Power (NWP), a subsidiary of RWE Innogy, is the UK's leading developer and operator of both onshore and offshore wind farms. Formed in August 1991, the company operates 13 onshore wind farms and is currently commissioning North Hoyle, the UK's first major offshore wind farm.

    NWP has recently been allocated 2 of 15 Round 2 offshore sites announced by the Crown Estates Commissioners and the DTI in December 2003. This allocation allows NWP to undertake further studies at these two potential sites off the British coast that would have a combined capacity of nearly 2 gigawatts. In addition, NWP has purchased the development rights for an offshore wind farm site off the Welsh coast called Rhyl Flats with a capacity of around 100 MW. This project has been granted all necessary planning consents and construction could begin in 2006.

    NWP will retain its existing renewable energy development team of approximately 70 professional staff.

    Website: www.natwindpower.co.uk

  3. North Hoyle Offshore Wind Farm

    The North Hoyle Offshore Wind Farm is targeted for transfer to Beaufort after an agreed period of operation. The wind farm is located 7-8km off the North Wales coast between Rhyl and Prestatyn. It comprises 30 wind turbines each rated at 2 megawatts (MW) and has a total capacity of 60MW. For further information, please visit www.northhoyle.co.uk.

    The wind farm was officially 'switched on' on November 21st 2003 and once fully operational will generate enough clean electricity for about 50,000 homes. This clean electricity is used to supply npower Juice customers. npower Juice is a pioneering green electricity product from the unique partnership between npower and Greenpeace. For every unit of electricity used by a npower Juice customer, a unit of renewably sourced electricity is fed in to the electricity grid. Juice is available at the same price as npower's ordinary electricity. To register for npower Juice, consumers anywhere in the UK can telephone the hotline on 0800 316 2610 or log on to www.SwitchtoJuice.com.

  4. Englefield Capital LLP

    Englefield Capital is a European private equity firm which raised an investment fund of €700 million in 2003 to invest in buyout and development capital opportunities primarily in the United Kingdom and other countries in Western Europe. Englefield Capital has studied the renewable energy sector for a considerable time and intends to make further investments in the sector as opportunities arise.

    Website: www.englefieldcapital.com

  5. First Islamic Investment Bank E.C.

    First Islamic Investment Bank E.C., with a paid-in share capital of $112.5 million, is headquartered in Bahrain with offices in Atlanta and London. At year-end 2003, the Bank had total assets of $818.0 million and shareholders equity of $188.9 million. To date, First Islamic has completed investment transactions with a total value in excess of $4.0 billion.

    Website: www.firstislamic.com

  6. Crescent Capital Investments (Europe) Limited

    Crescent Capital is a private equity firm that seeks to acquire significant equity interests in successful growth companies as well as in portfolios of assets in the real estate, infrastructure, oil and gas, utility and capital equipment sectors. Crescent Capital is a 100% owned subsidiary of First Islamic Investment Bank E.C.

    Website: www.crescentcapital.com

  7. npower

    npower is one of the UK's largest energy providers supplying gas, electricity, home maintenance, warranty and conveyancing services to over 6 million customers anywhere in the UK mainland.

    Website: www.npower.com/juice

  8. RBC Capital Markets

    RBC Capital Markets is the global investment banking arm of the Royal Bank of Canada, one of North America's leading financial services companies having a market capitalisation of £18bn, ranking it amongst the top 25 banks in the world. The London headquartered European Energy & Utilities Group specialises in advising on all aspects of private finance in relation to renewable energy as well as arranging and underwriting debt funding. The team is backed-up by a full London based distribution platform operating in the banking, derivatives and capital markets.

    Website: www.rbccm.com

  9. Augusta & Co plc

    Augusta & Co., is an independent, London based, merchant bank providing corporate finance and capital markets services to European middle market clients. Augusta & Co., is a leading adviser on debt and equity raising and M&A in the renewable energy sector.

    Website: www.augustafinance.com

  10. ERGO Finance

    Ergo is an independent renewable and energy adviser. Founding members include John Devaney, Edward Hyams and Simon Harrington who between them provide significant renewable and energy industry expertise.


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