Dudgeon offshore wind farm secures GBP1.3 billion project financing

The developers of one of the world‘s largest offshore wind farms have recently announced they have reached financial close in six months for the 402 MW Dudgeon Offshore Wind Farm through a GBP1.3 billion (US$1.87 billion) long-term financing, which will fund the capital requirements of the project.

Dudgeon Offshore Wind Farm, currently under construction, will be equipped with 67 wind turbines model, SWT-6.0-154 (Siemens), each with a capacity of 6 MW, totaling 402 MW installed generation capacity. The annual energy production is estimated to be 1.7 TWh. The North Sea project site is located 32 km offshore, north of the town of Cromer in North Norfolk, and 20 km north-east of the Sheringham Shoal Offshore Wind Farm.

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%). 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%.

The Mandated Lead Arrangers comprise:

• Bank of Tokyo-Mitsubishi UFJ
• BNP Paribas
• Crédit Agricole Corporate & Investment Bank
• KfW IPEX-Bank
• Mizuho Bank
• Abbey National Treasury Services plc (trading as Santander Global Corporate Banking)
• Siemens Financial Services, 
• Societe Generale Corporate & Investment Banking
• Sumitomo Mitsui Banking Corporation

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.

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.

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. 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.

Halfdan Brustad, 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.”

“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. More than 50% of the construction cost is anticipated to be spent in the UK supply chain.”