Northland Power tops up majority equity stake in 600 MW North Sea offshore wind farm to 60%
Friday, Jan 31, 2014
Northland Power Inc. ("Northland") (TSX:NPI)(TSX:NPI.DB.A)(TSX:NPI.PR.A)(TSX:NPI.PR.C) today announced it has entered into agreements for the rights to acquire Typhoon Offshore B.V.'s 5% interest in Gemini, a 600MW offshore wind project currently in advanced development. Subject to final documentation and the approval of its Board, this would top up Northland's intended majority equity stake in Gemini to 60%.
Gemini is located 85 kilometres off the coast of the Netherlands in the North Sea. Combining favourable sea bed conditions with one of the strongest and most reliable wind resources in the world, the North Sea could produce enough energy to power Europe four times over. Once constructed, Gemini will be the largest wind farm in the North Sea.
Northland has taken a lead role in completing the remaining outstanding development activities since its announcement in August 2013, and intends to continue its active leadership role during construction and into operations.
Gemini will play an important role in helping the Government of Netherlands' achieve renewable energy targets mandated by the European Union's Renewable Energy Directive, which calls for all Member States to reach a 20% share of energy from renewable sources by 2020. There is currently 5 GW of installed capacity in 58 operating offshore wind farms in European waters with another 5.5 GW in construction or advanced development. According to the European Wind Energy Association (EWEA), it is anticipated that there will be up to 150 GW of installed offshore wind power in the EU by 2030, meeting 14% of the EU's electricity demand.
"Today's announcement underlines our confidence in this project," noted John Brace, CEO of Northland Power. "We are very pleased with the progress made to date, and look forward to working with our consortium partners to bring Gemini to fruition.
Gemini is well advanced, and has received commitments for EUR 950 million in senior secured construction and term debt from 10 international commercial banks. In association with a EUR 500 million facility previously announced by the European Investment Bank and loans under negotiation with three European export credit agencies (Denmark's EKF, Germany's Euler Hermes and Belgium's ONDD), this completes the EUR 2 billion of senior debt required by Project Gemini.
Project Gemini's total cost is projected to be EUR2.8 billion, and is expected to be financed with a combination of non-recourse project debt, mezzanine financing and equity from the consortium.
"Acquiring the rights to a majority equity stake in Gemini is consistent with our commitment to fostering sustainable growth that allows us to deliver reliable returns to investors," added James Temerty, Chairman of Northland Power's Board of Directors. "The accretive nature of this project will benefit Northland's shareholders over the long-term."