UK green investment bank invests 461m in two UK offshore wind projects
- DONG Energy
- Marubeni Corporation
- RWE Innogy
- Green Investment Group Ltd (former UK Green Investment Bank)
Related M&A Transactions
- UK GIB acquires 10 % stake in offshore wind farm
- UK GIB and Marubeni acquire 50 % stake in offshore wind farm
GIB is investing alongside Japan's Marubeni Corporation to jointly purchase a 50% stake in the Westermost Rough offshore wind farm, from DONG Energy. GIB is committing £241 million to the c. £500 million transaction.
The Westermost Rough project, currently in the early stages of construction off the coast of Yorkshire, will utilise Siemens' next generation 6 MW direct drive turbines which are almost twice the size of the majority of wind turbines operating in UK waters. This is the first time these new turbines will be commercially deployed in the UK and the project is the first time that GIB has taken construction risk in an investment.
Once operational, Westermost Rough will generate over 800GWh of net renewable electricity, equivalent to the electricity consumption of c. 200,000 homes, a city the size of York.
GIB has also agreed to acquire a 10% stake in the Gwynt y Môr offshore wind farm, from RWE Innogy. The purchase price is £220 million. The project, off the coast of north Wales, is in the late stages of construction.
Gwynt y Môr is the largest offshore wind farm under construction in Europe. Once operational it will generate over 1,700 GWh of net renewable electricity each year. This is equivalent to the electricity consumption of c. 400,000 households or meeting the electricity requirements of a city the size of Bristol.
GIB said the proceeds of both sales are expected to be reinvested back into renewable energy projects in the UK.
Shaun Kingsbury, Chief Executive, UK Green Investment Bank, said:
"The UK has ambitious plans to build on its position as a world leader in offshore wind. We have two roles to play in supporting those plans. Firstly, to directly invest to help developers recycle their capital into the next wave of new renewable energy projects. Secondly, to invest on fully commercial terms to create a demonstration effect which others will follow."
"DONG Energy's Westermost Rough wind farm is a critical project in the development of the UK's offshore wind sector. For the first time we will see the commercial deployment of a 6 MW wind turbine, almost double the size of the typical existing turbines. This is an important step in reducing the costs of offshore wind construction and power generation."
These investments are part of a strategy, led by GIB, to mobilise capital into the UK offshore wind industry. Helping developers to refinance part of their investments in developed projects is essential to ensuring that the industry is able to deliver the next round of new projects. By making these investments on fully commercial terms GIB is able to directly finance the expansion of the sector and create a demonstration effect that other investors can follow.
Samuel Leupold, Executive Vice President, DONG Energy Wind Power, said:
"The agreement with Marubeni and the UK Green Investment Bank is a major step for DONG Energy's partnership model. We have been able to enter into a shared construction risk partnership and at the same time we have locked-in significant value creation from the transaction. Marubeni and UK Green Investment Bank are two well-established and credible strategic investors and their decision to become our joint venture partners in Westermost Rough is a vote of confidence in DONG Energy's ability to manage and execute offshore wind construction projects and to deploy new technology."
Dr Hans Bünting, CEO, RWE Innogy said
"This is planned to be the second direct investment from the Green Investment Bank into one of our UK offshore wind farms. By continuing to open up our projects to investors, we maintain our stated objective of being a trusted partner for the transformation of the European energy system, within which the UK has a key role. Our aim is to raise additional capital for the extension of renewable energy in Europe by creating attractive investment models. I am delighted that the Green Investment Bank has chosen RWE once again for its investment in the offshore wind sector. This reinforces the quality and attractiveness of our projects".