SSE Renewables and Equinor have achieved financial close on phases A and B of the Dogger bank offshore wind farm, which together total 2400MW, off the UK coast.
Dogger Bank A and B will each require total capital expenditure of around £3bn, including offshore transmission capital expenditure of around £800m per phase.
The total senior debt facilities across the two phases is £4.8bn, plus ancillary facilities of around £0.7bn, totalling £5.5bn.
The final group of lenders comprises 29 banks and three export credit agencies and include experienced lenders in the sector along with relationship lenders of both SSE Renewables and Equinor.
The lead arranger is BNPP Paribas and export credit agencies comprise Bpifrance Assurance Export, GIEK, the Norwegian Export Credit Guarantee Agency, and EKN, the Swedish Export Credit Agency.
GE Energy Financial Services partnered with the co-sponsors to support insurance cover from Bpifrance, the French export credit agency, which insured a portion of the ECA debt financing.
GE Energy Financial Services’ partnership with Bpifrance resulted in the first insurance cover from the French export credit provider for an offshore wind farm project.
Separate debt facilities structured by the project co-sponsors are supported by GIEK and EKN.
GE Energy Financial Services CEO Susan Flanagan said: “Sourcing financing from the private and public sectors to enable GE’s flagship 13MW Haliade-X offshore wind farm technology in the UK demonstrates increasing appetite by developers and investors to build and fund renewable energy infrastructure projects.
“As more mega-offshore wind projects come to market, we are seeing sponsors tap into export credit agencies to support the debt requirements of these capital-intensive projects and attract the needed capital to bring such projects online.”
Dogger Bank A and B are being project financed with gearing of between 65% and 70% for the generation assets. Gearing on the transmission facilities is set at 90% of the forecast OFTO sale proceeds.
The joint developers said investment in the first two phases of the project has already secured the creation of 320 new skilled jobs for the North East of England associated with the development and operation of the wind farm, with more to come as construction ramps up.
These include 120 skilled jobs at marshalling harbour Able Seaton Port in Hartlepool during construction, and 200 skilled jobs to be based offshore and at the Port of Tyne for operations and maintenance of the wind farm.
Equinor new energy solutions executive vice president Pal Eitrheim (pictured) said: “Reaching financial close on the two first phases of Dogger Bank is a major milestone, demonstrating our commitment to profitable growth within offshore wind.
“The extensive interest from lenders, underpins the attractiveness of UK offshore wind assets and confidence in SSE and Equinor. As the wind farm’s future operator, we are proud to take this big step forward in delivering what will be the backbone of a growing wind hub in the North Sea.
“Through the sheer scale of the project we have delivered record-low contract prices for the UK market, and as operator of the wind farm we will continue to deliver value to the UK for years to come.”
Dogger Bank is being built in three 1.2GW phases, with the first two phases being constructed at the same time to maximise the synergies resulting from their geographical proximity and make use of common technology and contractors.
A and B are being financed concurrently with all lenders participating in each phase in equal proportions.
The third phase, Dogger Bank C, is being developed on a different timescale with financial close to follow at a later stage.
With a capacity of 3.6GW, Dogger Bank will be the largest offshore wind farm in the world when operational.
SSE chief executive Alistair Phillips-Davies said: “We are proud to be leading on the construction and development of Dogger Bank Wind Farm, which has been 10 years in the making.
“We are putting our money where our mouth is on delivering net zero and reinforcing the UK’s position as a world leader.
“This investment will help drive a green recovery from coronavirus through the project’s construction over the next five years, creating jobs and boosting the local economy.”
Dogger bank, located over 130 km off the north east coast of England, will be the first project to use the largest commercially available turbine in the world, the 13MW GE Haliade-X.
When fully completed in 2026, Dogger Bank Wind Farm will produce enough electricity to meet 5% of the UK’s demand.