IPPToday #329: 400 MW offshore wind farm in the UK refinanced for US$1.6 billion
- Equinor (formerly Statoil)
- China Resources (Holdings) Co., Ltd
- BNP Paribas
- DBS Bank
- DNB (DnB NOR ASA)
- Mitsubishi UFJ Financial Group (MUFG)
- Skandinaviska Enskilda Banken AB (SEB)
- Société Générale
- Sumitomo Mitsui Banking Corporation (SMBC)
- Norinchukin Bank
- Aviva Investors
- Alberta Investment Management Corporation (AIMCo)
- M&G Investments
- Fitch Ratings
This article is part of a daily series of IPP articles. If you want to know more about the latest power generation projects globally visit our IPP Today section. You can receive them by email on a daily basis.
The shareholders of the 402 MW Dudgeon offshore wind farm in the United Kingdom have announced the signing and pricing of privately placed notes for the refinancing of the project’s existing non-recourse project debt, with financial close expected next week.
The refinanced debt consists of approximately GBP1.27 billion (US$1.60 billion) in fully-amortizing senior-term loans, comprising around GBP561 million (US$706.4 million) in commercial debt and a GBP706 million (US$888.9 million) private placement of senior secured notes, maturing in June 2032.
Both tranches were oversubscribed, reflecting strong credit features and investor interest. The commercial tranche will be fixed upon the financial close of the transaction and execution of interest rate hedging.
The notes have been publicly rated A- by Fitch Ratings, which reflects Dudgeon’s efficient operations and robust asset performance. The financing also includes approximately GBP150 million (US$188.9 million) in ancillary facilities provided via commercial bank commitments.
The Mandated Lead Arrangers were BNP Paribas Fortis S.A./N.V.; DBS Bank (Hong Kong) Limited; DNB Bank ASA; MUFG Bank, Ltd; Skandinaviska Enskilda Banken AB; Societe Generale London Branch; Sumitomo Mitsui Banking Corporation, London Branch; and The Norinchukin Bank.
Note purchasers included managers and accounts from leading UK and US institutions, including Aviva Investors, Alberta Investment Management Corporation, LGIM, Manulife, Barings, M&G Investments, Nuveen, Pension Insurance Corporation, Rothesay Life, Siemens Bank and Equinor Pension Fund
The advisory group included legal advisors Linklaters and Allen & Overy, MUFG and Societe Generale Corporate & Investment Banking acting as joint Financial Advisor, Rating Advisor and PP Note Arranger, technical advisors Wood, and insurance advisors Aon and Willis.
Dudgeon is developed and operated by Equinor (35%), formerly known as Statoil; Abu Dhabi’s renewable energy company Masdar (35%); and Chinese conglomerate China Resources Group (30%).
Dudgeon started operations as scheduled in October 2017. It was one of the first UK offshore wind projects to be awarded an investment contract under the UK government’s ‘Contract for Difference’ (CfD) scheme, in May 2014, and the first CfD offshore wind project to obtain financing, in May 2016.
The 402 MW wind farm is located 32 kilometres off the coast of Norfolk, eastern England. It produces 1.7 terawatt-hours (TWh) of electricity annually, the combined output of 67 wind turbines, sufficient to power an estimated 410,000 UK homes and displace 893,000 tonnes of carbon dioxide.