RWE seals £1.5bn Galloper deal

RWE has committed to building the 336MW Galloper offshore wind farm after attracting three new partners for the £1.5bn UK project.

The utility made a final investment decision this week with the UK Green Investment Bank, Siemens Financial Services and Macquarie Capital each becoming 25% joint equity partners alongside RWE.

The quartet said the 56-turbine Round 2.5 project off Suffolk would combine their “expertise and experience”.

Onshore construction is due to to kick off next week starting with the substation. The full project is due to commence operations in March 2018.

Siemens will supply and install 6MW turbines starting in May 2017 and will also deliver a 15 year maintenance contract.

GeoSea will lead on foundations while the contract for electrical system works was awarded to Alstom and Petrofac.

The European Investment Bank provided £225m in finance as part of a £1.37bn debt package organised with a consortium of 12 commercial banks. The EIB cash is the first for a UK offshore wind project from the EU’s €315bn strategic investment plan. BNP Paribas acted as financial advisor to the project.

RWE chief executive Hans Bunting said: “Today’s announcement is the culmination of many months of successful negotiations with our partners and investors and shows that the UK is still a strong market for offshore renewables.

“Siemens, as well as becoming a project partner, will also through their technical division support key aspects of the project including turbines, turbine installation and maintenance support. We welcome GIB, with their experience of supporting renewables ventures and their substantial knowledge of offshore wind financing, back to another offshore partnership, their first ever equity investment being a stake in our Rhyl Flats project.”

He added: “Macquarie Capital brings considerable international business and finance acumen as well as a strong track record advising and investing in infrastructure and energy projects globally.”

Siemens head of energy finance Wolfgang Bischoff said: “Achieving financial close quickly was an essential component for Galloper to remain on-track in regards to construction as well as becoming operational in time to qualify from the government’s Renewable Obligation Certificate subsidies. The speed in which it was achieved owes much to the hard work of our project partners, as well as the strong market confidence in Siemens’ technical and financial experience in this sector.”

Energy Minister Andrea Leadsom said:  “This is fantastic news for the region and the whole of the UK, reflecting the fact that we are open for business and the best place in the world to invest in offshore wind. This milestone shows how the UK’s offshore wind industry is going from strength to strength.”

RWE shelved Galloper in October last year over fears the project could miss the RO deadline and subsequently resurrected the plans with the new partners in place.

Former project partner SSE, which signalled its intent to depart Galloper some time ago, will no longer be involved in the project.

“Successfully agreeing exit terms with RWE is a positive step and means the released funds can be utilised for other projects within the company’s investment portfolio,” said SSE.

It remains a co-owner of the adjacent 504MW Greater Gabbard wind farm alongside RWE.

Image: the neighbouring Greater Gabbard wind farm (RWE)