Nordsee One offshore wind farm reaches Financial Close

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Nordsee One offshore wind farm reaches Financial Close

Northland Power Inc. and RWE Innogy GmbH have reached financial close for the German 332 MW Nordsee One offshore wind farm project.

The total project investment is estimated at €1.2 billion (US$1.27 billion). Northland owns 85% of the offshore wind farm to be located 40 kilometers off the coast of Germany, and RWE retains the remaining 15% interest.

Approximately 70% of the project’s required costs will be provided from an €840 million (US$889.3 million) non-recourse secured construction and term loan and related loan facilities from ten international commercial lenders. The lending group includes ABN AMRO, Bank of Montreal, Commerzbank, Export Development Canada, Helaba, KfW IPEX, National Bank of Canada, Natixis, Rabobank and The Bank of Tokyo-Mitsubishi.

Nordsee One is entitled to a feed-in tariff subsidy under the German Renewable Energy Act. A substantial portion of the project returns are earned during the feed-in-tariff period, while the remainder of the planned returns are expected from the German wholesale electricity market.The project is located 40 kilometers north of Juist Island in German territorial waters with shallow water and high wind speeds. Once operational, Nordsee One is expected to generate over 1,200 gigawatt hours of electricity per year.

Senvion SE will supply, install, and maintain the 54 wind turbine generators for the project, each with a 6.15 MW capacity.

The project was advised by Green Giraffe (financial), Linklaters (legal), Chatham (hedging). The banks were advised by Clifford Chance (legal), Sgurr (technical), Benatar (insurance), Corality (model audit) and EY (tax).

Northland and RWE also jointly own two early-stage development projects, Nordsee Two and Nordsee Three, each with the same ownership levels as Nordsee One (85% and 15% respectively). These projects, totaling approximately 670 MW, are anticipated to be developed over the next decade as offshore wind tariffs are extended and the grid infrastructure is made available.

Offshore wind development is a key feature of Germany’s ‘Energiewende’ program, the official policy supporting renewable power generation with a stated goal for offshore wind capacity of 6.5 GW of installed capacity by 2020 and 15 GW by 2030.

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