£370m invested into Yorkshire-based offshore wind farm

A consortium of financiers including Siemens and Bank of Tokyo-Mitsubishi have invested £370m in refinancing part of Dong Energy’s Westermost Rough offshore wind farm, marking the latest transaction for the innovative project being constructed off the Yorkshire coast.

The Green Investment Bank (GIB) yesterday confirmed it had refinanced the majority of its £500m stake in the project, with a group of lenders, which also includes the Japan Bank for International Cooperation, Mizuho Bank and Societe Generale, providing limited recourse debt.

In borrowing against the project, the GIB and its partner Marubeni, now have raised £370m that they plan to reinvest in another offshore wind project.

The GIB announced the deal yesterday, which is due to be completed in the coming weeks. It highlights growing investor confidence to takie on offshore wind construction risk, rather than just lower risk operational projects.

At 210MW, Westermost Rough will have a relatively small capacity compared to some of the larger Round 3 projects in the pipeline. However, it will mark a milestone for both DONG and Siemens, as it will be the first to use Siemens 6MW dedicated offshore turbines.

"This is an important transaction in the development of offshore wind in the UK, said Ed Northam, head of investment banking at GIB.

"In refinancing part of our 50 per cent equity stake in the Westermost Rough project – jointly held with Marubeni - we have brought in a number of new, long-term financiers to the sector. Increasing the number of long-term debt providers in offshore wind is critical in both ensuring there is sufficient capital to finance new construction projects and lowering the cost of capital for the sector.

"This is exactly the type of financial innovation needed to support the ongoing growth of the UK’s green economy."

Earlier this year, the Green Investment Bank revealed it was seeking to launch a new £1bn fund that aims to make it easier for pension funds and insurance companies to invest in the UK's growing offshore wind sector.

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