Investment trust Greencoat UK Wind plc (UKW) said on Monday it agreed to buy the South Kyle Wind Farm in the south of Scotland from Swedish state-owned energy firm Vattenfall for £320 million once the farm begins operating in 2023.

Vattenfall said South Kyle will be able to power 170,000 UK homes.

UKW is a listed renewable infrastructure fund, invested in 36 operating UK wind farms. UKW is managed by Greencoat Capital LLP, a European renewable investment manager with £5 billion of assets under management.

South Kyle is located 5km east of Dalmellington on the boundary of Dumfries & Galloway and East Ayrshire.

It will consist of 50 turbines with aggregate generating capacity of 240MW and a grid connection of 235MW.

Vattenfall said it will purchase the power for a period of 15 years.

“South Kyle is a subsidy free wind farm and it has entered into a route-to-market PPA with Vattenfall Energy Trading GmbH for the 15 years following commissioning,” said UKW.

“Vattenfall will construct the wind farm and will manage the asset on behalf of Greencoat UK for a minimum of 10 years once operational.

“In addition to supporting the local economy through new jobs created, once operational, the wind farm will provide £38 million of direct investment into local schemes through its community benefit programme over the lifetime of the wind farm.”

UKW chairman Tim Ingram said: “We are delighted to enter into an agreement with Vattenfall, our fifth major utility partner.

“South Kyle is in close proximity to a number of other wind farms already owned by Greencoat UK Wind, and we are confident it will be another high quality addition to our portfolio.”

Laurence Fumagalli of Greencoat Capital LLP added: “We are pleased with the transaction, which will bring a large scale subsidy free wind farm under our ownership.

“While we continue to expect the majority of our portfolio to comprise ROC accredited assets, the scale of our portfolio and balance sheet allows us to acquire a combination of different types of UK wind farms, such as South Kyle, and thereby find best value for shareholders.”

Vattenfall CEO Magnus Hall said: “The planned construction of the South Kyle Wind Farm shows our commitment to the United Kingdom and its transition to climate neutrality as well as delivering on Vattenfall’s goal to enable fossil free living within one generation.”