John Laing Group ('John Laing'), the international active investor and partner behind responsible infrastructure, is this morning providing a trading update covering the first quarter of 2020.
We continue to prioritise the health and wellbeing of all our people and are fully adhering to government guidance in each of the markets in which we operate. We are proud to have developed and own frontline assets such as Royal Adelaide Hospital in Australia and Alder Hey Children's Hospital in the UK. We continue to work with all our stakeholders to find ways of supporting them at this critical time.
For our primary portfolio, comprised of assets under construction, only two of our 16 projects have experienced complete site closure and both are preparing to re-open, subject to appropriate workplace protocols. Elsewhere, construction works have continued albeit with some delays due to reduced staffing levels and availability of materials. Our largest asset, IEP East remains on track with 53 out of 65 trains having achieved qualified acceptance.
Our secondary portfolio, comprised of operational assets, is well positioned given its bias towards availability-based PPPs as well as wind and solar projects, the majority of which have long term off-take agreements in place. Asset availability has been maintained in-line with expectations. Only two of our 32 assets are volume based - the I-77 Managed Lanes project in the US and the A130 in the UK (c50% of revenue exposed to volume). Although both have seen significant reductions in traffic, the valuation for the I-77 in particular is based on a long concession period which means it is insulated from short-term effects.
For the portfolio as a whole, progress with value enhancements has been modest, with operational improvements hampered by the lockdown. Credit market movements have eroded some of the upside from opportunistic refinancings. For those SPVs with short-term debt, none have any requirement to refinance in 2020 and we continue to monitor the market closely.
Investments and realisations
The current crisis presents both opportunities and risks - we see mid-to longer-term opportunities relating to the potential role of infrastructure in building resilience and supporting economic recovery, while the risks relate mainly to shorter-term timing effects. As previously outlined, investment activity in early 2020 has been subdued and we continue to expect modest progress in H1. The majority of opportunities are subject to public procurement processes and, with public bodies in most geographies focused on the immediate crisis, we have seen some slippage of investments timing from 2020 into 2021. On the other hand, the current environment also creates scope for late-stage entries and M&A opportunities that are not yet reflected in the pipeline.
We are pleased to have announced the divestments of Buckthorn Wind Farm and our French wind portfolio during Q1 for total proceeds of just over £70m. We continue to progress our divestment plans, albeit the logistical challenges of lockdown, including conducting onsite due diligence, could cause some delays. While it is too early to fully understand the impact of COVID-19 on secondary markets, the combination of a weak macro-economic outlook and lower interest rates should serve to highlight the attractions of our assets, particularly those which are availability-based. Moreover, our strong financial position gives us flexibility to ensure we maximise value.
In summary, while our investments pipeline remains strong, consistent with the 2019 year end position, and we have continued to progress our divestments programme, it is too early to fully assess the impact of the crisis on timing for both.
Net Asset Value ('NAV')
For the first half of 2020, we expect only modest value creation from project delivery, value enhancements and value uplift on financial closes primarily due to the effect of COVID-19, although overall H1 NAV growth (before dividends deducted) will benefit from an IAS 19 pension gain due to higher corporate bond yields.
In terms of factors outside of our control, to date we have experienced a modest foreign exchange gain, while the long-term off-take agreements in place for our wind and solar assets have insulated us from short-term power price volatility.
Looking ahead, there are a number of factors that could impact our portfolio, and therefore NAV, which we are monitoring closely, the most significant being deflation, long-term power prices and construction delays.
Balance sheet and dividend
The Group's balance sheet and liquidity position remain strong, with financial resources of c£340m available at 1 April to deploy into investment opportunities. In view of this position and our continuing confidence in the business's prospects, the Board has decided that it is appropriate to proceed with paying the 2019 final dividend of 7.66p per share (including special dividend), pending approval by shareholders at the 2020 AGM.
As separately announced today, we are pleased to confirm the appointment of Ben Loomes as Chief Executive Officer and expect him to take up the position on 8 May.