Canada Fund Buys Stake in U.K. Wind Farm

TORONTO--Canadian pension giant Caisse de Depot et placement du Quebec Friday said it acquired a stake in a big U.K. offshore wind farm from Danish energy company DONG Energy A/S for 644 million pounds ($1.06 billion).

The investment underscores Canadian pension funds' continued interest in global infrastructure assets such as toll roads, bridges and utility operators, which generate steady income to help the funds meet their long-term pension liabilities. Quebec-based Caisse de Depot is Canada's second-largest pension fund as measured by assets.

The transaction comes on the same day two other Canadian pension funds announced infrastructure deals. Ontario Municipal Employees Retirement System bought a stake in Ontario's Bruce Power nuclear plant from Canadian uranium producer Cameco Corp. for 450 million Canadian dollars ($403 million), increasing its stake in the power generator to 56.1%. Canada Pension Plan Investment Board, the country's biggest pension fund, invested $200 million for a 10.4% stake in Transportadora de Gas del Perú S.A., Peru's largest natural gas pipeline operator.

Caisse de Depot is acquiring half of DONG Energy's 50% stake in the 630-megawatt London Array 1 offshore wind farm, which London Array says is the largest of its kind in the world. The Array project's 175 turbines are capable of generating energy to power almost 500,000 U.K. homes, according to London Array's website.

Caisse de Depot, which oversees almost C$186 billion in assets, is betting that growing global pressure to reduce harmful carbon emissions will drive demand for wind energy and other alternative energy sources.

The deal "is an opportunity for us to invest...in a growth-driven sector, " Macky Tall, head of infrastructure investment for the fund, said in a statement. "We are investing in this project with a long-term horizon," he said.

Write to Ben Dummett at [e-mail]

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