Bid & Tender
Masdar JV Wind Farm Bags $1.8bn Project Financing

Date : May 18, 2016

Dudgeon Offshore Wind said it has secured £1.3-billion ($1.84 billion) financing for a 402 MW project being co-developed by Abu Dhabi’s renewable energy company Masdar (with a 35 per cent stake) along with Norwegian oil and gas company Statoil (35 per cent) and state-owned electricity company Statkraft (30 per cent).

 

It is the first offshore wind project to obtain financing under the UK government’s ‘Contract for Difference’ (CfD) scheme. The project met its milestone requirement this month, said a senior company official.

 

The long-term financing will fund the capital requirements of the Dudgeon Offshore Wind Farm, currently under construction 32 km 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; Crédit 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.

 

Masdar CEO Mohamed Jameel Al Ramahi said: "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."

 

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. Crédit Agricole Corporate & Investment Bank acted as the documentation bank. 

 

Halfdan Brustad, the chairman of Dudgeon Offshore Wind Limited, said: "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."

 

"It is also a testament to the project’s commercial competitiveness, smooth execution, and the growing investor appetite for utility-scale renewable energy," he added.

 

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.

 

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, said Brustad.

 

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

 

"Dudgeon demonstrates the willingness of its developers to support the ongoing 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," noted Brustad.

 

More than 50 per cent of the construction cost is anticipated to be spent in the UK supply chain, he added.

 

Elsewhere in the UK, Abu Dhabi’s renewable energy company Masdar is a co-owner of the 630 MW 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 10 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, the 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,” he added.