IPPToday #247: 400 MW offshore wind project in Germany amends financing to secure US$1.8 billion
- Partners Group
- InfraRed Capital Partners
- DEME Group
- GE General Electric
- KfW IPEX-Bank
- ABN AMRO
- Commerzbank AG
- Deutsche Bank
- Skandinaviska Enskilda Banken AB (SEB)
- Sumitomo Mitsui Banking Corporation (SMBC)
- Société Générale
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Merkur Offshore has successfully amended the financing agreements for its 396 MW wind project, securing more competitive terms for senior debt amounting to EUR1.5 billion (US$1.76 billion). This will fund the installation of 66 wind turbines in the German North Sea, approximately 45km north of Borkum.
Merkur is a joint venture owned by funds managed and/or advised by Partners Group (50%), Infrared (25%), DEME (12.5%), and Coriolis (12.5%), which is a joint venture of GE and L’Agence de l’Environnement et de la Maîtrise de l’Energie (ADEME) representing the French government.
As reported on this platform, the wind project originally achieved financial close in August 2016. This consisted of around EUR500 million (then US$558.6 million) equity from Merkur's shareholders, and EUR1.2 billion (US$1.4 billion) senior secured debt from ten lenders: KfW Mittelstandsbank, ABN Amro, Commerzbank, Deutsche Bank, KfW IPEX, Natixis, Rabobank, SEB, SMBC and Société Générale.
Societe Generale Corporate & Investment Banking (SG CIB) acted as financial advisor, Mandated Lead Arranger (MLA) and restructuring & market hedge coordinator in amending this financing. The existing facilities have been amended to enable a syndicate of 13 international lenders to participate.
The amendments enable Merkur to benefit from the current competitive debt market environment and to optimize debt pricing, leverage and tenor in the future post construction of the project.
In parallel with the amended financing, Merkur has switched from the compressed tariff to the base tariff under the German Renewable Energy Act (EEG), therefore enabling the project to benefit from a longer period of guaranteed and stable income stream.
The wind farm is currently in construction, with turbine installation having begun in March this year. It is expected to be fully commissioned in 2019, after which it will generate enough energy to power around 500,000 homes.