The Renewables Infrastructure Group (TRIG ) is falling in line with rivals after setting out plans to launch a £50m share buyback programme this month following the sale a stake in a wind farm off the coast of Germany.

The £3bn fund yesterday announced it had sold 15.2% of Gode, an offshore wind farm north-west of Norderney in the German sector of North Sea, for €100m (£84m), 9% above its previous valuation, to funds run by UK infrastructure investor Equitix. TRIG retains a 9.8% position in the 330-megawatt asset.

The sale lifts total proceeds from four other disposals over the last 12 months to £210m, most of which has been spent reducing borrowings on its credit facility, which totalled £334m at 30 June and cost 4% a year in interest.

Cash from Gode and the sale of Irish onshore wind farm Pallas in March would further reduce its borrowing to £195m by the end of the year, it said, assuming half of the buybacks are undertaken this year.

‘Compelling’ investment

Having previously hinted at buybacks to narrow its 16% share price discount, chair Richard Morse said the company would begin buying back stock after the publication of its interim results on 9 August for a 12-month period.

Panmure Liberum analyst Shonil Chande said the buybacks were overdue. ‘TRIG has increasingly appeared as an outlier in the sector for not having an active repurchase programme so this is a welcome development. Given its size, and the very strong capital allocation argument for repurchasing shares at the discounts it has traded at, we think the market has been disappointed with the lack of a programme to-date,’ he said.

Morse said the disposals enhanced TRIG’s net asset value (NAV) and created headroom for future growth. InfraRed fund manager Minesh Shah, who took over after Richard Crawford retired this year, continued to assess attractive investment opportunities, which included share buybacks, and further selective disposals, he said.

Considering the company’s strong balance sheet and the double-digit discount he said TRIG offered a ‘compelling investment opportunity’.

Today TRIG revealed  its NAV per share fell 1.6p in the second quarter to stand at 123.4p at 30 June with the impact of below-budget energy generation, outages at the Hornsea and East Anglia 1 wind farms partly and lower revenue forecasts partly offset by the sale of Gode.

While the cable disruption at Hornsea One – which also affected Greencoat UK Wind (UKW ) – has been resolved, works had been scheduled for East Anglia 1 with commercial protection in place to recoup future losses, TRIG said.

On revenues, TRIG said power price forecasts increased during the second quarter, recovering some of the reductions in short-term pricing in the first three months of the year, although it noted the rebound had been weaker in Sweden and Spain.

This added 0.2p to NAV per share but was offset by a 0.5p reduction from the prices of European guarantees of origin certificates coming off recent highs and a 0.3p per share knock from a cut to the valuation of its battery projects under development following a slump in revenues earlier this year.

In early trading the shares slipped 1.3% to 104p leaving them still at a 16% discount to the new NAV and just above the 101.6p at which we tipped them in February.

The 7.2%-yielder reaffirmed it was on track to pay 7.47p per share in dividends this financial year.