RWE Finds New Partners for $2.3 Billion U.K. Offshore Wind Farm

RWE AG will build a 336 MW wind farm off the east coast of England after teaming up with the U.K. Green Investment Bank, Siemens Financial Services and Macquarie Capital on the 1.5 billion-pound ($2.3 billion) project.

The four partners, which will each hold a quarter of the program, secured a 1.37 billion-pound debt facility to fund the wind farm from a group of 12 commercial banks and the European Investment Bank, RWE’s Innogy unit said Friday in a regulatory statement. Siemens AG will provide 56 6 MW wind turbines, maintaining them for 15 years.

The project is the second large U.K. offshore wind project to announce a final investment decision this week, after Dong Energy A/S said on Wednesday that it will build the world’s biggest farm in the Irish Sea. That’s a fillip for Prime Minister David Cameron’s Conservatives, who have been criticized by the renewable energy industry after announcing plans to cut subsidies for onshore wind, solar and biomass projects.

“The U.K. is still a strong market for offshore renewables,” RWE Innogy Chief Executive Officer Hans Buenting said in the statement.

RWE had been searching for partners for Galloper since SSE Plc said it was backing out from what was then a 50:50 venture in March 2014. The utility aims to complete the Galloper project by March 2018 in order to qualify for U.K. support under the renewables obligation program, known as ROC. In a separate statement, Siemens said it aims to start installation in May 2017.

‘Significant Milestone’

“The previously shelved project has risen like a phoenix from the ashes,” Keegan Kruger, a European wind analyst at Bloomberg New Energy Finance, said in an e-mail. The new partnership has “enabled the project to reach this significant milestone which will see it secure a timely ROC accreditation during a period of policy uncertainty that currently surrounds the future of offshore wind in the U.K.”

The Galloper project is about 27 kilometers (17 miles) off the coast of Suffolk, and is an extension of the already-generating, 504 MW Greater Gabbard farm. About 700 jobs will be created during construction of Galloper, with 90 permanent jobs once it’s operational, Siemens said.

The European Investment Bank’s contribution to the financing is 225 million pounds, the lender said in a separate statement on its website. The other funders include BNP Paribas SA, which also acted as financial adviser, ABN Amro Bank NV and Lloyds Bank Plc.

©2015 Bloomberg News

Lead image credit: Siemens.

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