Secures GBP1.3bn project financing

The developers of one of the world's largest offshore wind farms announced the limited recourse financing for the project today, having reached financial close in six months. 

The GBP1.3 billion long-term financing will fund the capital requirements of the 402-megawatt (MW) Dudgeon Offshore Wind Farm, currently under construction 32 kilometres out to sea from the North Norfolk coast of East England. 

The Mandated Lead Arrangers comprise The Bank of Tokyo-Mitsubishi UFJ, Ltd., a member of MUFG; BNP Paribas; Credit Agricole Corporate & Investment Bank; KfW IPEX-Bank GmbH; Mizuho Bank, Ltd.; Abbey National Treasury Services plc (trading as Santander Global Corporate Banking); Siemens Financial Services; Societe Generale Corporate & Investment Banking, London Branch; and Sumitomo Mitsui Banking Corporation. 

Dudgeon is being developed by the Norwegian oil & gas company Statoil (35%), Abu Dhabi's renewable energy company Masdar (35%), and Norway's state-owned electricity company Statkraft (30%). 

"The completion of the Dudgeon wind farm will bring Masdar's gross installed clean energy capacity in the UK to more than 1 gigawatt, further evidence of our growing international footprint and the strength of our commitment to the UK renewable energy industry," said Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar. 

The advisory group included legal advisors Linklaters and Allen & Overy, financial advisors Societe Generale Corporate & Investment Banking, technical advisors SgurrEnergy, and insurance advisors Aon and Willis. Credit Agricole Corporate & Investment Bank acted as the documentation bank. 

Dudgeon is the first UK offshore wind project to obtain financing under the UK government's ‘Contract for Difference' (CfD) scheme. The Project met its Milestone Requirement in May 2015. 

Statkraft and Statoil are also participating in the financing through sponsor co-lending. Statkraft will finance its 30% share in the project, while Statoil will finance a share of 17.5%. 

"Closing such a significant phase of the project's development so swiftly illustrates the energy industry's confidence in the long-term potential of offshore wind, and the increasing sophistication of financing models available to the sector," said Halfdan Brustad, Chairman of Dudgeon Offshore Wind Limited. "It is also a testament to the project's commercial competitiveness, smooth execution, and the growing investor appetite for utility-scale renewable energy." 

Brustad added: "Dudgeon demonstrates the willingness of its developers to support the on-going growth of the UK green economy. The project benefits the UK's offshore wind industry; at least 70 local jobs are created directly in the operations phase, additional jobs during construction and indirectly in the supply chain. More than 50% of the construction cost is anticipated to be spent in the UK supply chain." 

On schedule to begin commercial operations by the second half of 2017, Dudgeon will deliver annual production of 1.7 terawatt-hours (TWh) of electricity, the combined output of 67 wind turbines. 

That is sufficient clean energy to power an estimated 410,000 UK homes and displace 893,000 tonnes of carbon dioxide annually. 

The project is already more than half-completed, with the first turbine monopile installed in early April, and construction of the wind farm's 1,000-tonne offshore substation under way. 

Elsewhere in the UK, Abu Dhabi's renewable energy company Masdar is a co-owner of the 630MW London Array, the world's largest offshore wind development currently in operation, inaugurated in July 2013. The company's investments in wind power also span projects in the Middle East, North Africa and the Pacific Islands. 

"Over the last ten years, Masdar has acquired significant operational experience demonstrating its ability to deliver ambitious, technically challenging projects according to plan and on schedule, including wind projects," said Bader Al Lamki, Executive Director of Masdar's Clean Energy division. 

"Dudgeon will be another impressive addition to a portfolio that today comprises 1.7GW of clean energy assets either deployed or under development, from utility-scale investments to off-grid projects serving remote communities, and another example of our ability to work in close partnership with other industry specialists."

Source: WAM