PGGM & Ampere Equity Fund GBP 224 M refinancing of their 24.8% stake in the 367 MW Walney offshore wind farm in the Irish Sea
Monday, Dec 24, 2012

PGGM and Ampere Equity Fund, acting jointly through a dedicated investment vehicle, OPW, are pleased to announce that they have closed the refinancing of the purchase (completed in December 2010) of their 24.8% stake in the Walney offshore wind farm (situated about 14 km off the UK coast in the Irish Sea), the largest operating wind farm in the world. A group of 4 commercial lenders: Lloyds Bank, the Royal Bank of Scotland plc, Santander, and Siemens Bank GmbH, together with the newly established UK Green Investment Bank plc (“GIB”), have provided between them facilities totaling GBP 224 M.

This financing will enable PGGM and Ampere Equity Fund to refinance on a non-recourse basis approximately 70% of the purchase price agreed with DONG Energy, the developer, operator and majority owner (with a 50.1% stake) of the project, that consists of 102 Siemens 3.6 MW urbines, for a total capacity of 367 MW. The first phase, Walney 1, was completed in July 2011, hile the second, Walney 2, was commissioned in June 2012. SSE also has a 25.1% stake in the project alongside DONG Energy and OPW.

The project is expected to provide power equivalent to the consumption of around 340,000 UK households and to abate 480,000 tonnes of carbon emissions annually on current energy generation figures.

This financing marks the first loan by GIB to the UK offshore wind sector and is the first financing of a project minority stake in the commercial banking market.

“PGGM and Ampere Equity Fund are delighted with the deal which brings together institutional investors, four market leading banks and the UK Green Investment Bank to complete the financing of what is one of the UK's most important renewable energy infrastructure projects. We look forward to continuing our successful partnership with our world class utility partners, DONG Energy and SSE, and to making a significant contribution to a sustainable energy future,” according to Dennis van Alphen, Senior Investment Manager Infrastructure at PGGM and John Bromley, Chief Investment Officer at Ampere Equity Fund.

Shaun Kingsbury, CEO of the UK Green Investment Bank, said: “The UK Green Investment Bank is delighted to work with PGGM and Ampere Equity Fund, as well as DONG Energy, SSE and the syndicate of banks
on its first project in the UK offshore wind sector, which is a priority sector for us. Walney was particularly attractive as it ensures that capital is recycled in the marketplace, delivers a commercial return to the bank and reduces carbon emissions in the UK.”

Marie de Graaf from Green Giraffe Energy Bankers: “We are delighted to have helped in successfully structuring this first financing by commercial banks of a minority stake in an offshore wind farm, and that GIB has provided their considerable support to the transaction. This demonstrates that it is possible for investors to take stakes in offshore wind projects and have these independently financed using limited recourse project financing. With larger offshore wind projects planned in coming years, this opens new avenues to finance these projects through separate transactions for each individual shareholder and thus to expand the investor universe able to invest in offshore wind projects.”

Mads Skovgaard-Andersen, Asset Manager at DONG Energy said: “This further evidence of the success of DONG Energy’s partnership strategy within offshore wind – achieving financial close in the current economic
climate – highlights the attractive qualities of these long term, stable assets for financial investors. The transaction has been a great collaborative effort from DONG Energy, the other Walney shareholders and the lenders. We are delighted that Walney was the first offshore wind project to benefit from the support of the UK Green Investment
Bank.”

OPW was advised by Green Giraffe Energy Bankers (financing), Clifford Chance (legal and tax), Chatham (hedging) and Deloitte (accounting). The lenders were advised by Mott MacDonald (technical), Norton Rose (legal), Jardine, Lloyd Thomson (insurance), PKF (model audit) and Pöyry (power market study). DONG Energy was advised by Watson, Farley Williams and SSE by Eversheds.

Source: PGGM

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