Activity in the renewables market has picked up with Octopus Renewable Infrastructure (ORIT ) announcing it has sold two Polish wind farms as part of its plan to ditch a number of small assets.

The £609m infrastructure trust, which saw below-budget output from its wind portfolio in the first six months of the year, said the sale of the Krzecin and Kuslin onshore wind farms would produce net proceeds of between PLN 470m to PLN 490m (£88m to £92m), a 14% to 19% premium to the holding value at the end of June.

The shares jumped 5% to 84.5p, narrowing their 26% discount to net asset value. 

Liberum analyst Joachim Klement said this was a ‘rare bit of good news in a difficult year for wind farms’ and showed that the discount had been ‘too large’. He retained a ‘buy’ recommendation on the investment company with a target price of 115p.

ORIT bought the wind farms in their construction phase in October 2021, bringing them into operation last year. It said they had generated an internal rate of return of 25% to 30% over the investment.

ORLEN, a Polish multi-energy company, is purchasing the two sites and will provide a loan to repay existing bank debt secured against the two farms, which have a combined capacity of 59MW.

The sale forms part of the investment company’s plan to sell some of its assets first announced in its 2022 results and reiterated in September’s half-year results. Proceeds from it will be used to repay short-term debt facilities. 

ORIT has total leverage of £511m or 46% of the market value of its assets. Short-term debt makes up £190m of that, or 17% of gross asset value, with an average term of 1.9 years.

Phil Austin, chair of ORIT, said paying down the debt will give the company ‘the ability to explore new opportunities to build more green energy projects’ which will create ‘even greater scope for capital growth’. 

Stifel Analyst Will Crighton upgraded the trust to ‘positive’ from ‘neutral’ as it relieved concerns over the fund’s leveraging. He said the payment on the RCF will ‘provide some breathing room’ for committed purchases of an Irish solar farm that is expected to complete in two to six months. 

In a separate note, Sachin Saggar, also an analyst at Stifel, said there had been an uptick in activity in the renewables space in the past week with ‘some sizeable investments changing hands’. Several of ORIT’s peers have indicated they too may sell off investments including Foresight Solar (FSFL ), NextEnergy Solar (NESF ), JLEN Environmental Asset Group (JLEN ), and Renewables Infrastructure Group (TRIG ).

Saggar said there were no details on the discount rates used to value the transactions but said ‘it is encouraging that there is investor interest’, adding that several of the listed renewables funds could ‘come on the radars of corporate or private fund buyers’ if their share prices did not recover.