Macquarie's MIRA acquires power station in Wales

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Macquarie's MIRA acquires power station in Wales

DONG Energy announced last week that the company has signed and closed an agreement with a consortium of investors led by Macquarie Group's Infrastructure and Real Assets (MIRA) business under which the consortium will acquire DONG Energy's gas-fired power station Severn.

Severn power station is situated at Uskmouth near Newport in South Wales and generates electricity for the British national grid.

The aggregated sales price for the Severn power station is GBP 350 million cash (equivalent to approximately DKK3.1 billion). In addition the agreement includes an earn-out based on future gross margin of the power station. The divestment is expected to result in a booked loss before tax of DKK 400-500 million ($74-92 million). The loss will not have any impact on EBITDA.

Thomas Dalsgaard, Executive Vice President in DONG Energy, said:

"We have succeeded in divesting the Severn power station at a satisfactory price in a difficult market. The divestment is an important element of the Group's strategy to divest non-core assets and thereby strengthen the capital base for the benefit of the future development of the company."

Severn power station has a capacity of 832MW and is able to generate power for  approximately 1.5 million British households, and it is one of the most efficient natural gas-fired power stations of its type in the UK at an 58 percent efficiency rate. Severn power  station commenced commercial operation in November 2010. The Severn power plant went into operation only three years ago.

From next year, gas-fired power plants will be eligible to take part in government-led capacity auctions, which will from 2018 reward power plants for standing by to produce electricity when needed to complement intermittent renewable energy.

Macquarie's MIRA also led an investment group that purchased EDF's 819 MW Sutton Bridge gas-fired power plant in Britain in December 2012.

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